Johannesburg, South Africa — 17 March 2009 – Mvela Resources has announced that it has refinanced the R2 billion mezzanine debt associated with its investment in Gold Fields. The Gold Fields transaction, which was concluded in March 2004, matures on 17 March 2009 with the mezzanine debt also due for redemption on that date.
An statement released here revealed that on the same day Mvela Resources would receive 50 million shares in Gold Fields, which have an aggregate market value of over R6 billion.
Commenting on the refinancing, Mvela Resources CEO Pine Pienaar said: “The funding, over a term of up to 12 months, has an approximate cost of 13.2 % per annum. This is less than the weighted coupon applicable to the mezzanine debt, and is a significant achievement given the difficulties many companies face recapitalising their balance sheets in the current market,” he added.
“Mvela Resources is positive on the outlook for gold and Gold Fields in the coming year, and refinancing the mezz debt will allow Mvela Resources to optimise the value of its Gold Fields investment at the appropriate time” said Pienaar.
“Contrary to market concerns about the so called debt burden threatening the future of BEE companies, the R6 billion gross value of the Gold Fields shares comfortably exceeds Mvela Resources’ total R4 billion debt, leaving the company with over R2 billion for further growth,” he pointed out.
“The Gold Fields investment has been an outright success for Mvela Resources in the five years since it concluded the transaction” concluded Pienaar.