JSE- and NYSE-listed Sibanye-Stillwater has announced that the lenders of its revolving credit facilities (RCFs), which include a $1-billion and a R5.5-billion RCF, as well as its Silicosis Guarantee Facility, have agreed to uplift the leverage covenant limits for all the facilities, which the company says further improves the flexibility of the facilities and the balance sheet.

This follows proactive engagement by the company with its lenders, consistent with its publicly stated intent to ensure it is able to maintain sufficient financial flexibility and optionality, as required, through a possible extended period of low commodity prices, Sibanye avers.

Lenders, comprising 11 international banks and four South African banks, agreed to uplift the leverage covenant limit for all facilities from the current 2.5x net debt to adjusted earnings before interest, taxes, depreciation and amortisation, to 3.5x for the period from June 30, 2024, to June 30, 2025 inclusive, and to 3x for the period from July 31, 2025, to December 31, 2025 inclusive.

Similarly, the interest cover covenant has been amended in line with the leverage covenant and the $1-billion RCF has been amended to include a letter of credit facility and an ancillary facility, to improve the facility’s flexibility and application.

“We have previously stated our intention to uplift our debt covenants along with pre-emptively evaluating various non-debt capital instruments such as prepays and streams, in order to secure the integrity of our balance sheet through the commodity price cycle, if required.

“The early uplift of our existing RCF covenant limits agreed to by our lending banks, is a significant indication of support and vote of confidence in the fundamental outlook for the group,” says CEO Neal Froneman.

“Although the group’s leverage is currently well below our existing 2.5x covenant limits and remains undemanding, the additional headroom resulting from the uplift provides further financial flexibility and should provide the market with increased confidence in the outlook for the group,” he adds.