Sibanye tackles balance sheet woes with cash placing of R1.8bn in new ordinary shares

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The entrance to the Sibanye-Stillwater mine. (Iavan Pijoos/News24)
The entrance to the Sibanye-Stillwater mine. (Iavan Pijoos/News24)

Sibanye-Stillwater is set to conduct a non pre-emptive cash placing of new ordinary shares, the miner announced on Tuesday evening.

The placing – to "certain institutional investors", according to Sibanye's statement – is being conducted through an accelerated bookbuild, to be launched immediately following the announcement.

It will apply to over 100 million new ordinary no par value shares in the authorised but unissued share capital of the company, representing some 5% of its existing issued ordinary share capital base. This is the maximum allowed under current authorities, Sibanye said.

Based on the current share price, the proceeds would amount to around R1.8bn or US$130m, the statement added.

JP Morgan Securities is acting as sole bookrunner.

Proactive steps

"Consistent with our three-year strategic goals, proactive steps to address our balance sheet leverage were taken during 2018, with US$400 million of the US$500 million stream transaction successfully applied towards reducing long term debt," Sibanye said.

"Significant progress on our deleveraging strategy was, however, delayed by the sharp decline in adjusted EBITDA from our SA gold operations in 2018."

The company also cited safety-related and "other operational disruptions" that severely impacted production.

It further referred to the Association of Mineworkers and Construction Union (AMCU) strike, which began on 21 November 2018.

"In order to ensure that any potential upcoming events can be negotiated in a strategically appropriate manner, as well as to favourably position the Group for any unforeseen external macro-economic downside risks during this period, management deems it prudent to ensure sufficient financial flexibility for the Group through the proposed placing," Sibanye said.

On Monday, Fin24 reported that according to AMCU, thousands of jobs will be lost at Lonmin over a three-year period following its merger with Sibanye-Stillwater.

AMCU lodged an appeal before the Competition Appeal Court to set aside a 2018 decision by the Competition Tribunal approving the merger. 

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