Banks pile in to provide Sibanye bridging finance
Gold producer says it has secured commitments from 16 banks towards a bridge loan to pay for its cash purchase of Stillwater Mining
Sibanye Gold has secured commitments from 16 banks towards a bridge loan of $2.65bn to pay for its $2.2bn cash purchase of all of US-based Stillwater Mining, which mines palladium and platinum, bringing the transaction a step closer to conclusion.
The loan was underwritten by City and HSBC and, as the mandated lead arrangers and book runners, they opened the three facilities underpinning the loan to syndication in January and Sibanye said on Monday it was oversubscribed by $1bn.
Two of the three bridging facilities totalled $1.9bn and raised more than $3bn in the syndication process, Sibanye said.
"The syndication attracted strong interest from banks with existing relationships with Sibanye, as well as a number of new international banks, which we believe reflects confidence in Sibanye’s operational and financial strategy," it said.
Included in the 16 banks were Absa, FirstRand, Standard Bank, Barclays, JP Morgan and Credit Suisse.
Sibanye must secure 75% approval from its shareholders at an extraordinary general meeting in coming weeks for the transaction that will give the gold and platinum miner it first offshore asset.
Sibanye CEO Neal Froneman has said he is confident the transaction will close by June this year, giving Sibanye one of the world’s lowest-cost platinum group metal (PGM) producers as well as a mine-to-market operation and recycling facilities, leapfrogging it into fourth place of global PGM producers ahead of Lonmin.