PPC gets banks to back 4bn-rand share

Bloomberg

PPC Ltd., South Africa’s largest publicly traded cement maker, said it received 4 billion rand (US$263 million) of bank guarantees to underwrite the sale of shares to existing investors, adding to facilities it received last week to redeem bonds.
A group of lenders including Standard Bank Group Ltd, Nedbank Group Ltd, FirstRand Ltd’s Rand Merchant Bank and Barclays Plc’s Absa will lead the rights-offer process and provide the standby underwriting commitment, Johannesburg-based PPC said. Standard Bank was appointed as sole global coordinator.
The agreement comes after PPC announced that it obtained 2 billion rand of guarantees from Absa, FirstRand and Standard Bank to back the early redemption of bonds. PPC is being forced to raise funds after S&P Global Ratings cut its credit rating to junk amid rising debt due to investment in new African projects, combined with a difficult trading environment.
“The execution of the irrevocable and unconditional guarantee in favour of noteholders as well as the signing of the standby underwriting agreement are two major milestones,” Chief Executive Officer Darryll Castle said. “These pave the way for the company to resolve its capital structure issues effectively, and focus its efforts on implementing its strategy going forward.”