Northam Platinum raises R1.65 billion in debt capital markets

The company will use the proceeds to settle maturing notes worth R1.25 billion.

Northam Platinum said it has raised R1.65 billion through a private placement of domestic medium-term notes, the company announced on Tuesday.

The company has essentially raised money through capital debt markets under its R2 billion domestic medium term note programme.

It has raised capital in debt markets in three tranches.  The mining company said it had placed R250 million worth of domestic medium-term notes maturing in a year, and another R250 million worth of notes that maturing in two years. It has also placed three-year notes R1.15 billion.

The company said the proceeds would first be used to settle maturing notes worth R1.25 billion.

“The issue of three-year term notes with an aggregate nominal value of R1.15 billion aligns with Northam’s medium-term intention to repurchase Northam ordinary shares and/or purchase Zambezi Platinum (RF) Limited preference shares,” the company said in a statement.

Paul Dunne (pictured), Northam’s CEO, said the raising of capital will allow the company to “maintain its balance sheet strength and funding flexibility in order to complete its various growth projects.” He said the capital will allow Northam Platinum “to commence a programme of repurchasing its ordinary shares and/or purchasing Zambezi preference shares to return value to shareholders.”

Northam is the second miner in two weeks to raise capital. Diversified platinum group metals company Sibanye-Stillwater recently said it has raised R1.7 billion in an oversubscribed share placement.

The amount raised is slightly lower than its initial target of raising R1.8 billion as the company is in the throes of restructuring its gold mines.

“While we remain confident that the current operating and economic conditions will support our deleveraging plans during the course of the year, the enhanced balance sheet flexibility provided by this transaction, will ensure that the company is appropriately positioned and sufficiently robust to endure any exogenous socio-economic challenges,” said Neal Froneman, CEO of Sibanye-Stillwater,in a statement.