De Beers “’ refinances
debt facilities with
R7.5 billion cash
injection
 
London, England — MININGREVIEW.COM — 24 March 2010 – The De Beers Group “’ the world’s top diamond producer “’ has wrapped up a refinancing of debt facilities and a cash injection of US$1 billion (R7.5 billion) from a rights issue to cut debt, after being battered during the global economic downturn.

The group “’ 45% owned by mining giant Anglo American “’ said in a statement issued here that it had cut debt by nearly a third. It did not give a figure, but in February the company said it expected net debt to fall to around US$2 billion (R15 billion).

“As we emerge from the recession in 2010, the completion of the refinancing process enables De Beers to take advantage of a number of exciting opportunities for growth up and down the diamond pipeline,” said chief executive Gareth Penny.

“The first quarter has been encouraging, since demand is recovering and revenues have risen at the first three sales events of the year,” a company spokeswoman added.

De Beers had a total of US$3.0 billion (R22.5 billion) of international loan facilities, of which US$1.5 billion (R11.25 billion) were due to expire this month. “All the new facilities have been renewed until 2012, with an option to extend them for another year,” De Beers said.

Full rights for the US$1 billion (R7.5 billion) fund raising were taken up by all three shareholders, Anglo, South Africa’s Oppenheimer family, which holds 40%, and the government of Botswana, with the remaining 15% stake.

Reuters reports that De Beers, which controls around 40% of the rough diamond market, was hit hard during the downturn as consumers shied away from luxury goods.

The group moved to an underlying loss of US$220 million (R1.65 billion) in 2009 after underlying net profit of US$515 million (R3.8 billion) in 2008, while rough diamond sales tumbled 46% to US$3.2 billion (R24 billion).