AngloGold secures $1bn loan

Johannesburg - South Africa's AngloGold Ashanti has secured a $1bn loan that will increase its debt burden but save it from being forced to sell assets immediately to refinance a convertible bond expiring in February.

The world's number three gold producer warned last month the credit squeeze would force it to seek new ways to refinance the bond, including possible asset sales, as it shelved plans for a new equity-linked instrument due to lack of liquidity globally.

AngloGold said on Friday the new loan, agreed with Standard Chartered Bank, will keep the company's liquidity levels high. But it bears interest of at least 4.25% above the Libor interbank rate compared with a spread of 0.4% on the company's existing $1.15bn revolving credit facility.

The higher rate of interest reflected changed market conditions, an AngloGold spokesperson told Reuters.

Chief executive Mark Cutifani told a conference call the company will continue to look to sell non-strategic assets, which may include some larger businesses whose sale would "substantially cover" the value of any credit it has drawn on.

The loan, which will carry interest of Libor plus 4.25% for the first six months after the first draw down and plus 5.25% thereafter, "removes all the financial risk that people saw for us as a business," Cutifani said.

AngloGold shares soared 6.26% to R164.69 by 08:53 GMT, outperforming a 1.96% rise in the Johannesburg Top-40 blue-chip index.

The loan is for an initial period of one year, with the option for AngloGold to extend it until November 30, 2010.

"As the market changes we can restructure and do something different ... but we have a two-year window with this existing facility to wait for the right time to do the right thing on a long-term basis," Cutifani said.

He said the company would still look to sell non-strategic assets, but can now wait until market conditions are right.

While it was already in talks to sell smaller assets, like the South African gold mine Tau Lekoa or its uranium assets, AngloGold might also look at disposing some of its larger operations which it says do not fit with its long term targets.

"We've got some assets that are quite sizeable but which ... don't fit into our long-term strategy. We will be looking to monetise them and strengthen our balance sheet," the CEO said.

Cutifani declined to say what the assets were, but said one of these operations would be able to "substantially cover any facility" the company has drawn on.

AngloGold also said there were no changes to its quarterly outlook, adding it was well positioned going into 2009.

- Reuters