JSE-listed Tongaat Hulett has completed the refinancing of its existing South African debt facilities, including its remaining term debt, working capital facilities, a revolving credit facility and overdraft facilities.
With the support of the South African lenders, the maturity of the existing senior debt facilities was extended to cater for the completion of the debt refinance, the terms of which have been revised from those agreed in a term sheet on June 12, owing to the impact on liquidity from operational challenges and the social unrest in KwaZulu-Natal.
Legal agreements with South African lenders were signed on December 3 and were subject to conditions precedent that were fulfilled on December 6, giving effect to the debt refinance.
A primary principle underpinning the debt refinance was to negotiate a sustainable core debt solution based on the company’s capacity to service the debt from forecast operational cash flows, with longer-dated facilities to create stability for the company.
The remaining balance of the debt that cannot be serviced from internally generated cash flows is allocated to two separate term loan instruments.
The debt refinance terms afford the company the opportunity to settle this remaining balance of the debt through strategic initiatives comprising an equity capital raise and property disposals over a period.