Diversified miner African Rainbow Minerals (ARM) on Monday announced that R3.98-billion of debt owed by ARM and its subsidiary ARM Coal to diversified miner Glencore Holdings subsidiary Glencore Operations South Africa (Gosa) as at June 30, 2017, has been restructured on an ARM attributable basis.
Additionally, debt of R1.83-billion owed by Gosa’s Participative Coal Business (PCB) to ARM and ARM Coal as at June 30, 2017, has also been restructured on an ARM attributable basis.
ARM and Gosa hold 51% and 49% respectively of the issued share capital in ARM Coal.
Further, ARM Coal and Gosa own and operate the Goedgevonden coal mine operation through an unincorporated joint venture in which ARM Coal and Gosa hold 51% and 49% participation rights, respectively.
Gosa owns and operates several coal mining operations in South Africa, referred to as PCB.
ARM and ARM Coal’s effective interests in the PCB are 10% and 20%, respectively.
Under the terms of the restructuring, debt owed by ARM and ARM Coal to Gosa will accrue interest at a rate of 0% compared with the previous rate, which was at prime, with effect from July 2017 to December 2029.
All operating cash generated by Goedgevonden mine and the PCB operations, attributable to ARM and ARM Coal, shall be applied in repayment of the debt until the earlier of December 2029 or full repayment of the loans.
Additionally, repayments by PCB and ARM Coal to ARM are delayed until all debt has been repaid to Gosa.