Harmony Gold $100m closer to paying off bridging loan for Moab Khotsong | Fin24
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Harmony Gold $100m closer to paying off bridging loan for Moab Khotsong

Jun 19 2018 18:38
Lameez Omarjee

Harmony Gold says it has paid off $100m (about R1.4bn) of a bridging loan it raised to acquire Moab Khotsong mine.

The mining company issued a notice to shareholders on Tuesday indicating that $50m was left to be paid for the loan, which was originally $200m.

"Harmony believes in having a robust and flexible balance sheet that supports its growth ambitions. 

"We have used the proceeds from the oversubscribed share placement announced on 6 June 2018 to repay $100m of the bridge facility," said CEO Peter Steenkamp.

The miner had raised R1.05bn, or $82m, through the placement of 55 million additional shares on June 6. However, this was R200m less than the group initially thought it would raise. The share price subsequently fell by 9%.

The share price on Tuesday was trading at R20.88 shortly before today’s shareholder announcement, and thereafter rose to R21.04. By 15:20, shares were trading at R21.44.

"Production at Moab Khotsong in the past three-and-a-half months support our view that the mine is a quality asset and it will strengthen Harmony’s cash flows further," Steenkamp added.

The Moab Khotsong transaction had been approved in February, Harmony confirmed in a shareholder notice at the time.

In the shareholder notice issued in February, Harmony said its acquisition of Moab Khotsong had been approved by regulators and the Department of Mineral Resources four months after it was announced.

"The integration of Moab Khotsong will enhance the quality of our portfolio and boost our cash flows," Steenkamp said.

Harmony intends to pay off the outstanding $50m (R693m) on the bridging loan through operating cash flows and proceeds from the share placement to African Rainbow Minerals, which is subject to shareholder approval.

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harmony gold  |  mining

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