Sibanye Gold Redeems Loan Debt to Pay Dividend at Year-End

Sibanye Gold Ltd. (SGL), South Africa’s second-biggest producer of the metal, repaid some of its loan debt to pay a dividend at the end of the year.

The company repaid 570 million rand ($62 million) of a revolving credit facility and a term loan, Johannesburg-based Sibanye said in a statement today. The 6 billion rand of facilities will reduce to 5 billion rand on Feb. 18, 2014, according to company filings. Under a revolver, money repaid can be borrowed again.

“In order to pay a dividend at year-end we’ve got to pay down 500 million-rand debt,” spokesman James Wellsted said by phone today.

Sibanye was spun off from Gold Fields Ltd. (GFI) last month and comprises the Kloof-Driefontein Complex, Africa’s largest gold operation, and the Beatrix mine. Sibanye, which entered the loan agreements on Nov. 28, is using the funds to refinance debt remaining after the spinoff and fund capital spending.

The company is paying 300 basis points, or 3 percentage points, above the Johannesburg interbank agreed rate, also called Jibar, on both the loans for the 12 months starting Feb. 18, Wellsted said. For the six months after that, the rate increases to 3.5 percentage points above Jibar, he said.

“We are obviously trying to renegotiate that with the banks,” Wellsted said. “We are in a quite cash-generative position.”

Sibanye is trying to extend the term of the loan, which matures in August 2014, he said. The debt facility was negotiated in October and November last year when the labor strikes were happening, he said.

To contact the reporter on this story: Jaco Visser in Johannesburg at avisser3@bloomberg.net

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net

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