South African labour union to strike at ArcelorMittal over job cuts
Africa's biggest steel producer was rocked by a two-week wage strike in May 2022.
Sibanye Stillwater on Friday said its lenders have agreed to lift the miner’s borrowing limits to help the company improve its cash position at a time of lower platinum-group metal prices.
The Johannesburg-based precious metals producer said on Friday that all of its lenders have agreed to raise the debt threshold on all facilities, in a move that could help the company strengthen its balance sheet.
Platinum mining companies in the world’s top supplier are cutting jobs and postponing spending on new projects as profits fall due to lower precious metals prices.
Sibanye CEO Neal Froneman said the agreement with the lenders would provide the company with “financial flexibility” and raise investors’ confidence it the outlook.
Debt covenants are formal agreements between a company and its lenders that the business will operate within certain limits.
Sibanye fell to a $2 billion loss last year and the CEO said in April the company was planning to raise about $500 million through metals prepayment and streaming arrangements.
Sibanye could have potentially breached some of its lending covenants by the end of this year due to weaker metal prices, and the agreement with the lenders should provide the company with “more breathing space,” BMO Capital analysts wrote in a note.
“Given the muted PGM price environment, we had previously anticipated that the company could potentially breach the leverage covenant by end of 2024,” the analysts said.
(By Felix Njini and Anchal Rana; Editing by Eileen Soreng and Louise Heavens)
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