Fraud-hit JSE-listed Sentula Mining has announced that it has signed a revised loan agreement governing the terms of its R1,6-billion debt restructuring.
Outstanding Debt
In terms of the agreement, the company will have to lop R400-million off its outstanding debt by the end of November. To achieve this, Sentula aims to sell shares of about R500-million in a rights offer.
Sentula CEO Robistone crusher plant den Berry tells Mining Weekly that the company needs to restructure its debt to relieve some of the burden on the compbarite crushing ball mill for saleany. However, the company also needs some concession from its lenders, the banks, to make it worthwhile for its shazenith stone crusher equipmentre- holders to invest.
“There is no point in making an investment, and then finding out that the debt terms are too onerous, especially in these fairly volatile times.
“We undertook to revisit our lenders and renegotiate the terms of the restructuring as far as possible, so that the terms were robust enough for shareholder money to be safe,” Berry says.
Sentula believes that the rescheduled terms and conditions, and the covenance under which the terms have been rescheduled, are now robust enough for the company to still see its way through unpredictable times.
Recapitalisation
Further, the restructuring will improve the company’s debt:equity ratio into its target range of between 40% and 50%, which is far safer than the 70% to 80% range that the company was in a year ago.
Berry says that the next step will be to finalise the recapitalisation process.