Northam Platinum to Raise $103 Million to Offset StrikeKevin Crowley
Northam Platinum Ltd., operator of the world’s deepest platinum mine, will raise 1 billion rand ($103 million) from selling shares and bank loans as it seeks to offset strike action and repair equipment.
Northam will raise 600 million rand through a so-called claw-back offer, fully subscribed by Coronation Asset Management (Pty) Ltd., in which 15 million shares will be sold at 40 rand each, the Johannesburg-based company said today in a statement. Banks will make 400 million rand available from a new revolving credit facility that ends on March 31, 2015.
“Challenging economic and operational conditions have beset the South African mining industry for an extended period of time, with depressed platinum group metal basket prices, volatile exchange rates, rising costs and a complex industrial relations environment,” the company said in the statement.
Northam lost 192 million rand of revenue in April after workers at its Zondereinde mine went on strike for three weeks resulting in reduced production. The funds raised will also be used to rebuild a smelter, ensure completion of the Booysendal mine and maintain equipment at its Zondereinde facility, it said in the statement.
The company, which posted a 70 percent rise in annual profit last month, said it has fully drawn down its current 1 billion-rand revolving credit facility.
The stock rose 3.9 percent to 42.65 rand in Johannesburg trading yesterday, giving a market value of 16.3 billion rand. The shares are up 12.2 percent this year.