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REGIONAL cement producer, Pretoria Portland Cement (PPC), is considering a rights issue of about R1.25bn to refinance both its domestic and international operations.

The 128-year-old business is struggling to manage a slump in demand for cement in South Africa amid an inflow of cheaper imports even before efforts to contain the coronavirus outbreak hampered building projects. It has footprint in Zimbabwe among other African markets.

While SA President Cyril Ramaphosa has identified privately funded infrastructure projects as key to an economic revival, the plan is at an early stage and is unlikely to affect PPC’s looming debt deadlines, close sources say. The shares have slumped by 66 percent in 2020, valuing the cement maker at R1.3bn.

A spokesperson for PPC said the company will provide an update on capital restructuring plans when appropriate. RMB, Nedbank and Standard Bank all declined to comment.

The cement maker has hired Gleacher Shacklock to seek more favourable terms for debt in the Democratic Republic of the Congo (DRC), close sources said.

The adviser is in talks with international lenders, which include the International Finance Corporation (IFC) and the Eastern and Southern African Trade Development Bank (TDB), they said. Gleacher, the IFC and the TDB could not immediately be reached for comment.

PPC has not reported financials since its half-year results in November, when it had gross debt of R5.1bn.

The company has since taken advantage of a regulator-granted extension to belatedly release annual figures to end-March on August 31.

PPC said in July that earnings fell more than 20 percent in that period and that lenders supported its efforts to navigate the crisis.

Money manager Value Capital Partners has been building a stake in PPC, becoming the second-largest shareholder, and its chair, Anthony Ball, recently took up an executive role at the cement maker to help improve its capital base.
-Bloomberg/Business Day