Platinum group metals (PGMs) producer Impala Platinum (Implats) is inviting holders of its $250-million 3.25% convertible bonds due in 2022 (USD bonds) to exercise their conversion rights.
Bondholders will receive a cash payment and shares in Implats in accordance with the terms of the USD bonds.
The optimisation of Implats’ balance sheet through a reduction and restructuring of its existing debt is a key pillar of its strategy to reposition as a profitable, sustainable and competitive business with clear capital allocation priorities and, ultimately, a return to a dividend paying position.
To this end, the USD bonds have been identified as a priority given their higher relative risk profile and costs when combined with the Cross Currency Interest Rate Swap.
"Rising rand PGM pricing and the reported improvement in operational delivery at Implats has had the dual benefit of both improving free cash flow generation and substantial share-price appreciation. This has allowed us to contemplate taking bold steps to accelerate our capital allocation priorities by taking advantage of market conditions to reduce a material debt obligation at the group,” Implats CEO Nico Muller says.