Sibanye-Stillwater (NYSE:SBGL) -7.9% pre-market and tumbles as much as 15% in Johannesburg after raising $120M (1.7B rand) in a share placement that analysts say suggests some desperation regarding its balance sheet.
The placement, which was offered to existing and new institutional investors, was at a price of ZAR15.50/share, a discount of 2% to the average price over the past 30 days on a volume-weighted average basis.
SBGL had sought to raise ZAR1.8B to position itself for labor talks and to restructure its gold mines; the placement represents 5% of its issued shares.
SBGL is worried about its ability to manage its debt obligations in the near term, but the amount raised will not move the company significantly into the black, says Hurbey Geldenhuys, head of research at Vunani Securities, adding that further risks could lead to larger and cheaper rights offerings later in the year.
The miner says Q1 gold production was hurt by the ongoing AMCU strike and is expected to total 104K oz., 90% of what was planned under strike conditions and 36% of production levels relative to the year-ago quarter; unit operating and all-in sustaining costs will be hurt by the reduced production levels.
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