Sibanye to seal Stillwater deal

Sibanye Gold expects to finalise the $2.2bn cash purchase of US-based palladium producer Stillwater Mining next Thursday

Sibanye Gold expects to finalise the $2.2bn cash purchase of USbased palladium producer Stillwater Mining next Thursday after shareholders in the companies agreed to one of the largest deals by a South African company since 2001, said CEO Neal Froneman.

Stillwater CEO and president Mick McMullen said on Wednesday: “We believe this is a very good outcome for Stillwater and delivers certain value of $18 per share in cash to our shareholders.”

He was speaking after 88% of the shareholders representing 75% of Stillwater’s issued capital voted in favour of a deal some analysts said was “fully priced”.

Sibanye has a $2.65bn bridging loan from a syndicate of local and international financial institutions to pay immediately for Stillwater and repay convertible bonds. The company will raise $1bn in a rights issue, with a circular sent to shareholders in the next 10 days, and a further $1bn through a corporate bond.

The balance of the loan will be paid before the end of 2017 through either a streaming deal on platinum from Stillwater, a convertible bond, bank debt or a rights issue.

Stillwater is the world’s only primary palladium producer and the largest source of platinum group metals (PGM) outside SA and Russia.

More than three-quarters of Stillwater’s annual 550,000 ounces of PGM comprises palladium, used to make autocatalysts for petrol-driven vehicles, while 22% is platinum, used in autocatalysts and jewellery.