Sibanye-Stillwater is exploring ways to cut debt


Miners take a break in a waiting area deep underground at Sibanye Gold’s Masimthembe shaft in Westonaria, South Africa, April 3, 2017. REUTERS/Mike Hutchings

South African precious metals producer Sibanye-Stillwater is exploring ways to cut debt, it said on Thursday, but ruled out tapping shareholders for funds.

Sibanye, whose net debt totalled 23.7 billion rand ($1.89 billion) at the end of December, has been on a debt-fuelled acquisition spree that has seen it diversify from gold to platinum with operations spanning two continents.

The company made an all-share offer for London-listed Lonmin in December in a deal worth 285 million pound ($386 million) that aims to create the world’s No.2 platinum producer.

Sibanye said it was concerned by the drop in its share price and market value, which accelerated in recent weeks, but was “proceeding according to plan” with the acquisition.

“This uncertainty is unwarranted and primarily driven by the concerns around high balance sheet leverage, the recent safety incidents and associated operational disruptions and concerns regarding the viability of the Lonmin transaction,” Sibanye said in a statement.

Earlier this month, seven miners were killed at Sibanye’s Masakhane mine after being trapped underground for two days after an earthquake caused a cave-in.

Shares in Sibanye have fallen 28 percent since the beginning of this month to 8.05 rand, while Lonmin shares have declined 23 percent to 7.39 rand since the beginning of the month.

($1 = 12.5605 rand)

(Reporting by Tiisetso Motsoeneng and Tanisha Heiberg; Editing by Ed Stoddard)