PIC, Afrisam bondholders agree on Afrisam reorganisation

PIC, Afrisam bondholders agree on Afrisam reorganisation
Published: 12 December 2011

The Public Investment Corp and most holders of EUR1.03bn of Afrisam Ltd. bonds due in 2012 agreed to a reorganisation of the debt, saving South Africa’s second-largest cement maker from collapse.

The PIC and 80 percent of the noteholders, including Pembani Group (Pty) Ltd. and BlackRock Advisors (U.K.) Ltd., agreed to the restructuring, the Pretoria-based PIC and other bondholders said in a joint e-mailed statement today. Afrisam is not yet part of the agreement, they said.

Afrisam’s existing debt position will be “materially reduced by” more than ZAR15bn (US$1.85bn), the companies said. “Afrisam will become a much stronger business with a de-levered capital structure and sufficient liquidity to meet the challenges of the current economic climate and beyond.”

Bunker Hills Investments Ltd., the largest shareholder in Johannesburg-based Afrisam with a 37 percent stake, on Dec. 2 lost a court bid to block the PIC, Africa’s largest money manager, from converting preference shares in Afrisam into equity. The PIC currently owns 20 per cent of Afrisam and will now convert its claims against Afrisam, giving it and Pembani, formerly known as Worldwide African Investment Holdings Ltd., 95 per cent of the cement maker.

The remaining five per cent of the business will be offered to junior debt holders, including Bunker Hills and Holcim Ltd, if they agree to the reorganisation, the bondholders said.