Fin24

Gold Fields takes $1.5bn demerger loans

2012-12-03 17:31

London - Barclays, Credit Suisse and JP Morgan have underwritten a $1.5bn financing package to back Gold Fields' demerger of two gold mines and refinance existing Gold Fields [JSE:GFI] debt, bankers said on Monday.
 
The three banks have opened a $900m loan to participation by other banks and will hold the remaining $600m as a bridge loan to a planned bond issue, the bankers said.
 
Gold Fields is spinning off two mines into a new company - Sibanye Gold -  as strikes and above-inflation pay gains boost costs and cut output for South African mining companies.
 
Sibanye Gold will be traded in Johannesburg and New York from February 2013. It will manage the Kloof-Driefontein Complex, Africa's largest gold operation, and the Beatrix mines, which have relatively short operating lives and require a different management approach, bankers said.
 
Gold Fields' demerger follows strikes that began in South Africa's platinum industry and spread to gold, iron-ore, coal and diamond mining. About 29,000 Gold Fields staff went on strike in the last three months, and won pay gains that added to rising power costs and capital spending.
 
The demerger is part of a new approach aimed at stopping the decline in production and increase in costs.
 
The $900m loan, which is being syndicated to banks, consists of a $450m, three-year term loan and a $450m, five-year revolving credit. The $600m bridge loan to a bond issue has a 21-month maturity.
 
Barclays is acting as co-ordinator and was also the adviser on the $1.5bn financing package.
 
A separate R6bn rand ($676m) loan is being arranged for Sibanye with a handful of lenders and will not be syndicated, the bankers said.
 
A bank meeting will not be held as Gold Fields recently redefined its group of relationship banks.
 
The company signed a $500m revolving credit facility in May, which was arranged by mandated lead arrangers, bookrunners and co-ordinaters Bank of Tokyo-Mitsubishi UFJ and Commonwealth Bank of Australia.

Comments
  • george.larkins.14 - 2012-12-03 17:42

    Wonder what the Unions going to do when these Mines retrench halve of the 29000 that went on strike?? Strike MORE,so that everybody else looses their jobs.Can,t they realise that their actions on the long term will only affect the workers.Mines will make other plans.LOOK AFTER YOUR JOBS NO MATTER WHAT THE PAY. AT LEAST IT IS SOMETHING.

  • altus.kirsten - 2012-12-03 21:59

    And the cookie crumbles...

  • simon.stamp.98 - 2012-12-04 07:57

    Let's be honest: This is Gold Fields way of leaving south africa wich I totally understand. Sibanye gold has no future with their short livespan, massive loans to pay back, wages already to high and definetely rising each coming year. As an Investor I will not even think of buying into Sibanye! Which mine will be next? surely there will be some if not all to follow because they all have the same problem.

  • vincentb.zulu - 2012-12-04 08:00

    Unions must come to their senses and realise that businesses dont hire people just to show off how many employees they have. For any company to hire people, it needs to be profitable. To this end, if union actions result in companies being less profitable then offcourse they need to reduce costs which means lay-offs. Equally, when eletricity is way expensive and other administered prices and tarrifts are way too costly, as is the case with Eskom, the likes of Transnet, ampong other utilities, then businesses will make lower profits and in turn will not hire more people. If businesses spend more time dealing with layers and layers of impractical legislation and compliance instead of running their businesses then again I'm afraid they cant be as successful (profit wise) and thereofr e employment suffers. All the above points to one critical issue, that is Competitiveness. We've got to (state, businesses, employees and UNIONS) look at all the issues that hamper our competitiveness and I am certain that if the will is there we can turn the situation around and grow our economy as well as we shuld be, which is potentially 5-6%. We need not scream on top of our voices and emigrate. We just need a collective effort like we have done with other pressing issues in the past

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