LONDON (Alliance News) - Aquarius Platinum Ltd Monday said it intends to offer to buy between USD150.0 million and USD225.0 million of its outstanding convertible bonds, and at the same time said it plans to fund the tender offer with a rights issue.
Aquarius Platinum shares were Monday quoted at 34.25 pence, down 3.5%.
The rights issue is intended to raise up to USD225.0 million.
In a statement, Aquarius said the tender offer will begin Monday and expire on Friday.
Aquarius said its level of gearing, with net debt at USD199.3 million at the end of January, is too high for a cyclical commodity producer of its size.
In addition, Aquarius said it is assessing the viability of a number of smaller projects aimed at increasing production at capital- and cost-efficient rates, which it said would be "significantly less complicated" if its balance sheet is restructured, allowing it to access new capital sources required for the development of these projects that would otherwise have been required to service existing
debt.
Aquarius said the rights issue is the most appropriate way of funding the tender offer because it provides existing shareholders with a chance to "rebalance" its capital structure on a "pre-emptive basis."
Aquarius said it intends to detail the terms of the proposed rights issue after the tender offer's expiry on Friday.
The rights issue is expected to be partially underwritten to an amount not less than the USD150.0 million minimum tender off acceptance level.
Aquarius issued the existing convertible bonds in December 2009, and about USD298.0 million remains outstanding. Aquarius said uncertainty amongst investors about its ability to refinance the bonds has "impacted negatively" on the attractiveness of investing in its shares.
Aquarius said it will retain any surplus if the net proceeds of the rights issue exceed the amount required to settle the tender offer. This, Aquarius said, will improve liquidity in order to fund
the redemption of the existing convertible bonds not validly tendered and repurchased pursuant to the tender offer on December 18, 2015.
Having not paid a dividend since September 30, 2011, Aquarius said it plans to reconsider the payment of dividends as soon as possible, but said that depends on a stable and positive commodity price outlook, operational progress and achieving an appropriate, long-term capital structure.
Aquarius said current trading is in line with its own expectations, and it expects to publish its unaudited financial report for the three months to the end of March on April 29.
Although not currently in the position to implement the projects, Aquarius said it may in the future consider recovering the PGMs in the tailings from the Kroondal concentrator plants; the re-commencement of production by the Everest mine; and an increase of between 10% and 15% of metal production by Mimosa by increasing hoisting capacity of the shaft.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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