South African cement producer PPC said on Friday it has reached agreement with lenders to reschedule the debt relating to a new $300 million plant in the Democratic Republic of Congo (DRC).
PPC, along with other South African construction firms, has been struggling to improve revenue and sales partly due to a slow roll-out of a government infrastructure investment package, squeezing its liquidity.
It has responded by borrowing heavily to build factories in Ethiopia, Rwanda, Zimbabwe and the DRC to boost overseas sales.
The firm said the total capital requirements for the DRC plant will now be limited to interest payments from January 2018 up to January 2020.
The plant is 60 percent debt funded by the International Finance Corporation (IFC) and Eastern and Southern African Trade and Development Bank.
PPC owns 69 percent of PPC Barnet DRC, while Barnet Group owns 21 percent and 10 percent is owned by the IFC.
The debt renegotiation also included an extension of the repayment period by an additional two years as well as an additional interest rate spread of 2.5 percent, making the new rate 6 month U.S. dollar LIBOR plus 975 basis points.
The initial terms of the debt included U.S. dollar denominated capital and interest payable biannually from July 2017 to July 2024, and six month U.S. dollar LIBOR interest rate plus 725 basis points.
“The rescheduling of debt firstly reduces the capital requirements by PPC Barnet DRC from PPC Ltd. Secondly it will improve cash flows for the DRC business which in turn will allow the business additional liquidity during this ramp up phase,” PPC’s chief financial officer Tryphosa Ramano said in a statement.
Reporting by Nqobile Dludla; Editing by Elaine Hardcastle (Reuters)
Nigeria’s central bank is unlikely to hold an interest rate setting meeting on Jan. 22 as scheduled because several new members of the monetary policy committee (MPC) have yet to be approved by lawmakers, two central bank sources told Reuters.
At least five of the MPC’s 12 members are due to be replaced after retiring last year. “The indications that the MPC might not hold are there because of quorum,” one of the sources said.
Central bank rules state that at least six members of the MPC are needed to approve an interest rate decision. A rate announcement had been expected on Jan 23, a day after the meeting.
The sources said the central bank would issue a statement.
At its last meeting in November, the MPC held rates at the same 14 percent level it has kept for more than a year, to fight inflation and to attract foreign investors to support the naira.
The head of Nigeria’s statistics bureau told Reuters this week he expects inflation to fall faster this year than in 2017 as the economy and currency stabilise, but warned that spending ahead of elections next year could stoke price rises.
Reporting by Chijioke Ohuocha and Camillus Eboh; Editing by Catherine Evans (Reuters)