PGM miners enter survival mode
The fat years are over — and Sibanye-Stillwater’s convertible bond may herald a rush by others to raise capital as platinum group metal prices bite
A dash for cash might be on the cards for South Africa’s haemorrhaging platinum group metals (PGM) sector if current spot prices persist for much longer. That’s the thinking of industry executives, who also expect production cuts to intensify as the sector seeks to minimise margin pressure.
A $500m convertible bond raised by Sibanye-Stillwater on November 21 caused some surprise. UBS analyst Steve Friedman observed that debt of this ilk is normally the fare of smaller companies with growth to fund rather than larger firms seeking margin protection. But Sibanye-Stillwater head of corporate affairs James Wellsted tells the FM the company wanted to jump in early. “We think there is limited capital for cheap money like our bond,” he says. He expects other companies to enter the bond market imminently. ..
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