Sibanye-Stillwater has priced a new oversubscribed $500m (R8.2bn) senior notes offering that strengthens its balance sheet and extends its debt maturity profile.
The notes, due in 2031, will be issued through the group’s wholly owned subsidiary, Sibanye-Stillwater UK Financing, as a single tranche of $500m, maturing in five and a half years at a 6.25% per annum coupon, Sibanye said in a statement on Friday.
CEO Richard Stewart said the more than five times oversubscription for the bond offering demonstrates investor confidence in the group, its strategy and the quality and resilience of its portfolio.
“Today’s [Friday] transaction marks another important step in strengthening our balance sheet, extending our debt maturity profile, and enhancing our financial flexibility,” he said.
The group, which is valued at R155bn on the JSE, has a target of reducing gross debt by about 50% over the next two to three years.
“Importantly, strengthening and improving the flexibility of our balance sheet, combined with optimising margins from our operations, strongly positions us to continue delivering on our strategy, including investing in organic value accretive growth and positioning the company to deliver future-facing metals that support the evolving energy landscape,” he said.
The offering forms part of Sibanye’s previously announced capital management measures to reduce gross debt by repurchasing outstanding debt securities.
The net proceeds of the notes, together with the group’s cash reserves, will be used to purchase existing notes issued by the group’s unit Stillwater Mining Company.
Earlier this week, Sibanye-Stillwater commenced, through Stillwater Mining Company, offers to purchase for cash the outstanding $675m senior notes due in November 2026 and up to $75m of the outstanding $525m senior notes due in 2029.
The successful repurchase of the existing notes could result in an overall reduction in group gross debt of up to $250m, the company said.
In April, Stewart’s strategic overhaul of the group secured the confidence of Moody’s Ratings as the company doubles down on cost-cutting amid the recovery of platinum prices.
Moody’s upgraded Sibanye’s outlook to “stable”, meaning that the miner has shed its “negative outlook” label for the first time since May 2024.
Chief among Moody’s reasons for the upgrade was Sibanye’s “conservative financial policies”, particularly the goal of slashing net debt in half and achieving a 1.0x net debt to earnings before interest, tax, depreciation and amortisation (ebitda) through the cycle.
The group’s share price closed down 2.68% at R54.80 on the JSE on Friday. Year-to-date the share price is down almost 10%.
— With Jacob Webster
Business Day
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