South Africa's Sibanye explores debt-cutting options
JOHANNESBURG, May 31 (Reuters) – South African precious metals producer Sibanye-Stillwater is exploring ways to cut debt, it said on Thursday, but ruled out tapping shareholders for funds.
Sibanye had net debt of 23.7 billion rand ($1.9 billion) at the end of December, accumulated after an acquisition spree that saw it diversify from gold to platinum with operations spanning two continents.
The company made an all-share offer for London-listed Lonmin in December in a deal worth 285 million pounds ($386 million) that aims to create the world's No.2 platinum producer.
Sibanye's ratio of debt to adjusted EBITDA is 2.6 times, well below levels agreed with creditors of 3.5 times but the company has a target to get it down to 1 times.
Sibanye said it was evaluating non-debt options, which would be announced "shortly"Sibanye said it was evaluating non-debt options, which would be announced "shortly", including raising up to $500 million via a streaming arrangement that involves forward selling a portion of its products at a fixed price.
It said it was concerned by the drop in its share price and market value, which accelerated in recent weeks, but was "proceeding according to plan" with the acquisition.
Shares in Sibanye have tumbled 28 percent since the beginning of May to 8.05 rand, while Lonmin shares have declined 23 percent to 7.39 rand in that time.
"This uncertainty is unwarranted and primarily driven by the concerns around high balance sheet leverage, the recent safety incidents and associated operational disruptions and concerns regarding the viability of the Lonmin transaction," Sibanye said in a statement.
Earlier this month, seven miners were killed at Sibanye's Masakhane mine after being trapped underground for two days after an earthquake caused a cave-in.
($1 = 12.5605 rand)
(By Tanisha Heiberg; Additional reporting by Tiisetso Motsoeneng; Editing by Ed Stoddard and Susan Fenton)