Harmony secures multicurrency credit facilities to strengthen liquidity
Gold and copper miner Harmony Gold has concluded new syndicated multitranche, multicurrency loan facilities comprising $500-million, A$500-million and R7-billion.
The company says this reduces its funding costs relative to the refinanced facilities, extends its maturity profile and strengthens liquidity, while revealing demonstrable support from the banking market.
Harmony highlights that the facilities will be used, in part, to refinance the company’s existing dollar and rand syndicated facilities entered into in 2022 to refinance the MAC Copper acquisition bridge facility and to support general corporate purposes.
“The successful conclusion of these facilities reduces Harmony’s funding costs, strengthens liquidity and optimises our capital structure. Importantly, the transaction extends our maturity profile and provides funding capacity in the currencies most relevant to our growth pipeline.
“This ensures that our balance sheet remains well-positioned to support disciplined investment in our strategic growth objectives while creating sustainable value for our stakeholders,” says Harmony CEO Beyers Nel.
Meanwhile, he points out that Harmony has introduced Australian dollar-denominated funding, reflecting the evolution of its asset portfolio following the acquisition of MAC Copper at a total transaction value of about $1.25-billion and the development of the Eva Copper Project, valued at about $1.55-billion to $1.75-billion.
As the company builds its Australian copper business alongside its South African gold operations, Nel says this funding structure improves financial flexibility, enhances the alignment between funding sources and underlying assets and supports the disciplined execution of Harmony's long-term growth strategy.
Financial service companies Citi and Nedbank Corporate and Investment Banking acted as joint global coordinators and were mandated lead arrangers on the refinancing, which attracted strong support from the banking market, with about 93% of lender participation and commitments totalling about three times the targeted amount.
Additionally, the four sustainability-linked loans have an original term to maturity of three years and include two one-year extension options, which could extend the final maturity date by a further two years. These loans are said to align with Harmony’s environmental, social and governance and sustainable development targets.
As part of this transaction, Harmony and the lending group have agreed on progressive sustainability targets over the next three financial years with an acute focus on cumulative renewable electricity installed capacity, a reduction in potable water consumption from external sources and an additional yearly spend on mine community development initiatives.
