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De Beers Renews Bank Credit Facilities

Mar 23, 2010 6:27 AM   By Avi Krawitz
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RAPAPORT... De Beers has renewed its bank loan facilities after concluding negotiations that began in mid-2009, the diamond mining company announced on Tuesday. The refinancing was comprised of both a renewal and an extension of its existing facilities and a $1 billion rights issue.

De Beers shareholders — Anglo American, E. Oppenheimer & Son, and the Botswana government — agreed in December to proportionally invest $1 billion in new equity to boost the company’s balance sheet by reducing its overall debt. Anglo owns 40 percent of De Beers, Oppenheimer 45 percent and the Botswana government 15 percent. The company reported that the funds have been received and used to repay debt.

Company spokesperson Lynette Gould said that the refinancing of the existing bank facilities reduces De Beers overall debt level by nearly a third. She explained that its international facilities amounted to $3.89 billion, including the previous $1.5 billion facility that matured today.

“With the shareholder investment, De Beers has lowered its bank debt through 2013 from $3.89 billion to $2.89 billion,” Gould wrote in an email to Rapaport News.

De Beers noted that all of its banking partners participated in the renewal. The company stressed that it now has the necessary capital structure in place to pursue opportunities within the diamond industry.

“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 Gareth Penny, De Beers chief executive officer (CEO).

Tags: Anglo American, Avi Krawitz, De Beers, Gareth Penny, Government, Mining Companies
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