PPC falls as adds asset sales to a possible rights issue


PPC falls as adds asset sales to a possible rights issue

Published Date: 2020-09-16 | Source: Stephen Gunnion | Author: Stephen Gunnion

PPC falls as adds asset sales to a possible rights issue

Its shares fell sharply after it said asset sales are also on the cards as its battles to reduce debt.

PPC says it is still considering raising capital from shareholders in order to strengthen its balance sheet and enable a broader restructuring of its operations. The cement producer says the move is in line with commitments given to its SA lenders following negotiations to refinance its capital structure. At the end of its 2019 financial year, total borrowings reached R5.12 billion.

In an update yesterday, PPC said it had made positive progress on the restructuring and refinance project, with its two main SA banks keeping its short-term facilities in place until at least next September, the extension of some long-term facilities, and the deferral of scheduled interest and capital repayments of long-term loans until next March. In return, it had committed to reducing its debt through a combination of a capital raise and asset sales. The rights issue was conditional on the implementation of other steps in the project.

It also signed a new working capital facility with its third SA bank under similar terms and conditions, providing access to ongoing liquidity until December 2021.

In the Democratic Republic of Congo, its PPC Barnet business had negotiated a term sheet with its lenders providing for a standstill to allow for the implementation of a long term restructuring plan.

Last month, the company further delayed the release of its annual results for the year to end-March after errors were detected in its 2019 accounts and due to disruptions caused by Covid-19. It expects to release the results by the end of the month.

Its shares fell 13.5% to 64c yesterday.

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