Harmony Gold received strong support from banks in a more than R21 billion multi-currency debt refinancing.
Image: David Grey / AFP
Harmony Gold Mining Company has reduced funding costs and strengthened liquidity after concluding new syndicated multi-tranche, multi-currency loan facilities of $500 million, A$500m, and R7 billion.
The transaction reduces Harmony's funding costs relative to the refinanced facilities, extends its maturity profile, and strengthens liquidity, while demonstrating strong support from the banking market, the mining group said in a notice to the JSE news service Tuesday.
The facilities will be used, in part, to refinance Harmony'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," said CEO Beyers Nel in a statement.
"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,” said Nel.
Harmony has introduced Australian dollar-denominated funding, reflecting the evolution of its portfolio following the acquisition of MAC Copper (total transaction value of about $1.25bn) and the development of the Eva Copper Project (about $1.55bn to $1.75bn).
“As the group builds a meaningful Australian copper business alongside its South African gold operations, 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,” said Nel.
Citi and Nedbank through its Nedbank Corporate and Investment Banking Division acted as joint global coordinators and mandated lead arrangers on the refinancing.
The financing attracted strong support from the banking market, with approximately 93% lender participation and commitments totalling around three times the targeted amount, said Nel.
“The significant oversubscription reflects the strength of lender confidence in Harmony and resulted in a substantial scale-back of commitments,” said Nel.
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.
The loans align with the company's environmental, social, and governance (ESG) and sustainable development targets. As part of the transaction, Harmony and the lending group have agreed on progressive sustainability targets, or key performance indicators (KPIs), over the next three financial years:
These include cumulative renewable electricity installed capacity, reduction in potable water consumption from external sources, and additional annual expenditure on committed mine community development initiatives.
“If the KPIs are met, Harmony will receive a margin reduction of up to 5 basis points, while a similar margin increase will apply if all targets are missed. The transaction does not result in any changes to Harmony's debt covenants,” Harmony’s directors said.
Last month, Harmony said in a production update it would meet its annual gold production guidance for the 11th consecutive year for the 12 months to June 30, 2026, with production expected to be between 1.4 million and 1.5 million ounces, underground recovered grades of about 5.80g/t, all-in sustaining costs within guidance, and capital expenditure slightly below plan.
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