Loan note changes add R811m to Northam’s liquidity for this uncertain year

The agreement was reached with a number of the noteholders, the company confirms.

Northam explains that the extension will be effected through the purchase and cancellation of the above-mentioned notes, and the simultaneous issue of new notes with longer-term maturities.

In addition, certain noteholders will invest additional capital and subscribe for new notes with an aggregate nominal amount of about R281-million.

In the short to medium term, the switch will serve to preserve liquidity, while the new funding will add liquidity and further strengthen the group’s balance sheet.

The new funding will increase the total nominal number of notes in issue under the programme by R281-million, from R5.2-billion to R5.5-billion.

From the date of issue, the new notes will mature over periods of nine months (R495-million), three years (R671-million), four years (R450-million) and five years (R550-million), respectively.

After the note switch, Northam notes that the remaining maturities under the programme for the rest of this calendar year will reduce from R550-million to R20-million, thereby reducing capital outflow in the current period, and mitigating some of the risk associated in this period of uncertainty associated with operating constraints occasioned by the Covid- 19 pandemic.

Northam CEO Paul Dunne says the company is appreciative of the support and confidence it continues to receive from investors in the DMTN programme.

“The R1.8-billion note switch will assist in preserving and strengthening Northam’s liquidity during the Covid-19 pandemic.

"Added to this is a R530-million reduction in maturities during calendar year 2020, coupled with an injection of R281-million of new capital, resulting in an R811-million increase in this year’s liquidity. This is a very positive outcome for Northam.”