Precious metals miner Sibanye-Stillwater’s wholly-owned subsidiary Sibanye Gold on September 18 exercised its option on its $450-million, 1.875 per cent convertible bonds due 2023 in line with the terms and conditions to redeem all outstanding bonds on October 19 at their principal amount.
This includes accrued but unpaid interest up to but excluding the optional redemption date.
The current aggregate principal amount of bonds outstanding is $383.8-million.
Holders of outstanding bonds are entitled, in terms of the conditions, to each exercise a right on the redemption of the bonds to convert the bonds into ordinary shares of the company.
Bondholders are expected to exercise their conversion rights and, if all such conversion rights are exercised, this will result in the issuance of up to 248.53-million ordinary shares of the company, as previously approved by the shareholders.
Should some bondholders fail to exercise their conversion rights, Sibanye Gold will redeem the remaining bonds from its cash resources.
The company reports that the redemption of the bonds will further improve the leverage and capital structure of the group, and signify the progress the group has made since issuing the bonds in 2017 for the acquisition of Stillwater, as it concludes a key element of the acquisition financing.
Further, the company states that the redemption of the bonds eliminates interest costs and related income statement revaluation costs and volatility, materially reducing financing costs and outstanding debt.