https://www.engineeringnews.co.za

Northam credit rating upgraded

11th September 2015

By: Megan van Wyngaardt

Creamer Media Contributing Editor Online

  

Font size: - +

JOHANNESBURG (miningweekly.com) – South African platinum miner Northam Platinum’s short-term credit rating has been upgraded from A2 to A1- by credit ratings agency Global Credit Rating.

It also reaffirmed the company’s long-term rating of BBB+ with a stable outlook, the company said on Friday.

The upgrade was obtained despite the industry outlook remaining negative on account of depressed platinum group metal (PGM) prices and cost inflation, illustrating the benefits of the group’s liquid balance sheet and strong shareholder support.

The basis of the rating was formed on the impact of Northam’s fully funded R6.6-billion black economic-empowerment transaction, which raised its empowerment level to 35.4%, on a secured basis for ten years, and incorporated a cash injection of R4.6-billion, notably enhancing Northam’s liquidity and flexibility.

Further, increased production supported the uplift in PGM sales, which saw the group’s revenue increase to over R6-billion for the first time in the 2015 financial year.

Higher mine output at Booysendal and general cost rigour also underpinned a recovery in the group’s operating profit margin, while the mine increased the group’s operational stability and reduced the concentration of risk.

The mine was set to reach steady production in the second half of the year.

A reduction in capital expenditure during the year, both deliberate and occasioned by the virtual completion of Booysendal North, Phase 1, also contributed to the positive rating, while Northam’s redemption of R1.4-billion in three‑year domestic medium-term notes reduced its debt to negligible levels.

A three-year wage agreement recently concluded with the National Union of Mineworkers at Northam’s Zondereinde mine also added to the upgrade.

Edited by Chanel de Bruyn
Creamer Media Online Managing Editor

Article Enquiry

Email Article

Save Article

Feedback

To advertise email advertising@creamermedia.co.za or click here

Showroom

Sulzer Pumps (SA) (Pty) Ltd
Sulzer Pumps (SA) (Pty) Ltd

Sulzer South Africa, established in 1922, partners with critical industries like power, oil & gas, water, mining, and chemicals to boost...

VISIT SHOWROOM 
WearCheck
WearCheck

Leading condition monitoring specialists, WearCheck, help boost machinery lifespan and reduce catastrophic component failure through the scientific...

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







301

sq:0.055 1.161s - 140pq - 2rq
Subscribe Now