PPC capitalisation restructuring on course

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  • All parts of the project progressing well
  • Revenue and EBITDA dropped by 5% to 10% in the material business segment

Harare – Dual listed regional cement manufacturer Pretoria Portland Cement (PPC) has announced that there is marked progress on the project the Group embarked on following the indication to investors in November 2019 that it was reviewing the capital structure of the Group.

According to PPC, there are three parts to the project and the first one entails the relaxation of covenants in respect of South African debt which is partially complete and is expected to be finalised within the next three months. Also, the extension of capital repayments with regard to the maturity profile in South Africa is in the early stages and progressing well.

In the second part of the project that is aimed to achieve an extension of the capital holiday in the DRC, negotiations have been concluded and the involved parties are finalising the related legal process which will result in the extension of the capital moratorium to January 2022.

Negotiations on the final part of the project which relates to the unsustainable debt levels in the DRC and its requirements for deficiency funding from PPC have commenced and PPC is considering various options for the refinancing and restructuring project that may include a capital injection by interested third parties into the International Cement business.

The group indicated that it will update shareholders at its interim results in June 2020 in this regard and added that it does not envisage a capital raise at PPC level for this purpose.

Under the material business sector consisting Lime, aggregates and readymix, the Group said the experienced a combined decline in revenue and EBITDA of 5% to 10%.

Constrained steel demand and the Saldhana shutdown hampered the Lime business while the aggregates and readymix business experienced muted demand due to their exposure to the domestic construction sector.

The Lime and aggregates businesses however, benefitted from increased steel production in the Gauteng region and a diversification strategy to broaden the customer base.  

Following the outbreak of the Coronavirus, in early March 2020, PPC has alluded that it is following the guidelines from the World Health Organisation, South Africa government and other regulatory bodies in the countries where the Group has operations.

“PPC continues to monitor the impact on the business both from an economic and social perspective and actively supports the containment of the risks for its employees and business partners contemplating various scenarios for future developments. PPC will keep investors updated as to any significant developments that are impacting the business. Currently, PPC is fully operational across all jurisdictions.”  Part of the statement reads.

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