Investors show appetite for mining, says Absa
BARCLAYS Africa on Friday said that it had successfully refinanced and upsized Harmony Gold’s existing $250 million (R3.2 billion) term debt to a three-year $350m facility in a move the bank said indicated that there was still investment appetite for South African mining companies from offshore investors.
The bank said the transaction was oversubscribed, with the debt syndicated to a total of eight lenders, including three new lenders.
In a statement, the bank said this allowed Harmony to broaden its banking group, bolster liquidity and achieve its global growth ambitions.
Absa is the largest lender in the new-term debt, and acted as bookrunner, co-ordinator and mandated lead arranger of the new arrangement.
”Harmony’s previous facility was set to mature in early 2018, and the gold mining company was looking to refinance its existing facility to allow it to expand its scope to fund its capital expenditure and growth plans in South Africa and Papua New Guinea,” the company said. Absa has successfully refinanced and upsized Harmony Gold’s existing $250 million (R3.2bn) term debt to a three-year $350m facility.
Harmony is rumoured to be interested in acquiring AngloGold’s local mines, but its chief executive Peter Steenkamp, while delivering the group’s full-year results for the year ended, would last week not be drawn in confirming the rumours. But he conceded that the company was in discussions with various partners over the boosting of its mines portfolio.
He said the company would not restrict potential acquisitions to South Africa, saying he was highly impressed with the mining regulation system that
was employed in Papua New Guinea.
The group has increasingly looked at Papua New Guinea for future growth.
Last year it bought full ownership of Hidden Valley mine, which was expected to add 180 000 ounces to Harmony’s 1.5 million ounces output target by 2019.
Harmony said it had spent $68m in the past year at its Hidden Valley operations, while it had budged $110m in the 2018 financial year.
The group, together with its joint-venture partners, are in Papua New Guinea engaging the government on the application for a special mining lease for the Wafi-Golpu project.
The joint-venture parties are targeting a complete update of its feasibility study by the end of March 2018.
Harmony in its results released last week mentioned that it had refinanced its debt, but did not specify which financial institutions were involved.
On July 28, Harmony entered into an agreement for a new three-year syndicated facility of $350m ($175m term loan, plus $175m revolving credit facility), the company said.