PPC’s Ball sets refinancing in motion

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PPC’s Ball sets refinancing in motion

Published Date: 2020-08-14 | Source: Stephen Gunnion | Author: Stephen Gunnion

PPC’s Ball sets refinancing in motion

The cement producer is negotiating a more sustainable structure for debt in the DRC and may pursue a rights issue.

PPC says it may consider a rights issue as part of a restructuring and refinancing of its operations as it negotiates more favourable terms for debt at its PPC Barnet business in the Democratic Republic of Congo. The cement producer says the need to refinance has been exacerbated by the economic impact of the Covid-19 pandemic.

In June, the group appointed Anthony Ball as an executive director and said he would be responsible for improving its current capital structure and leading negations with local and international funders. This would free up CEO Roland van Wijnen to focus on implementing strategic changes that had been identified to improve the business and ensure the adjustments caused by the impact of Covid-19 were properly addressed. Ball, who was already a non-executive director, is non-executive chairman of Value Capital Partners (VCP), which owns about 15% of PPC.

In an update ahead of the release of its result at the end of the month, PPC said any capital raise would be conditional on it meeting a number of criteria, including agreement with its SA lenders to provide ongoing access to unused debt facilities, the reset of debt covenants, and deferred payments to give it greater financial flexibility due to the uncertain trading environment. Other conditions included an agreement with PPC Barnet's lenders on its capital and interest obligations as a precursor to agreeing on a sustainable capital structure for the business and to relieve PPC of its contingent obligations.

As part of the restructuring and refinancing, PPC plans to raise capital in its international business. While this would likely result in a dilution of its interest in PPC International, it expected the business to remain a group subsidiary.

In addition to Ball's appointment as an executive, PPC said Gleacher Shacklock LLP had been hired as financial advisor. It is targeting the end of March next for the completion of the restructuring and refinancing.

Its shares fell 2.4% to 81c yesterday.





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