London, England — MININGREVIEW.COM — 06 February 2009 – South Africa-focused PGM miner Aquarius Platinum – which is in the process of seeking to refinance US$167 million (R1.7 billion) in debt – is involved in discussions about possible mergers.
Fin24.com reports that Aquarius – which has posted a first half-year net loss of US $70 million (R700 million) – did not identify which firms were involved in the talks.
Chief executive Stuart Murray said that due to weak metals prices and a slide in share prices, companies were now valuing themselves based on their net asset value (NAV). “It probably means that acquisition or consolidation or whatever will probably be based around respective NAV’s. The price of assets and the value of assets… those have disconnected,” he told a conference call.
“Certainly we are in the midst of some discussions like that,” he admitted. “I think the whole thing is the consolidation of the many to produce a few stronger players.”
Analysts have long called for a reduction in the large number of small platinum players in South Africa that grew rapidly during a commodities boom, but are currently under heavy pressure from a collapse in prices.
Murray also confirmed that Aquarius was seeking to refinance its US$167 million (R1.7 billion) bridge debt facility due in June with Rand Merchant Bank. “Negotiations are at an advanced stage and we’re moving to documentation on a proposal to refinance this debt,” he said. Details were expected to be released in three to four weeks.