RBPlat’s hand strengthens further after mopping up last of R1.2bn bond a year early

ROYAL Bafokeng Platinum (RBPlat) mopped up the last of a R1.2bn convertible bond announcing today it had converted 29,837 shares equal to around R298.4m. The bond was due to mature in March next year.

Hanré Rossouw, RBPlat CFO, said at the platinum group metal (PGM) company’s year-end announcement in February that the bond was “well in the money”. He said today the convert of the bond had seen the company’s shares in issue “tick up a little”.

The bond was issued in 2017 at R40.79/share which compares to a current RBPlat share price of R103,94/share – a gain over 12 months of nearly 210%.

In February, RBPlat announced it would pay a maiden dividend for its 2020 financial year of 575 cents per share – about 50% of free cash flow before expansionary capital – and forecast an increase in production of platinum group metals by as much as one quarter.

This was on the back of 1,354.4 cents per share in headline earnings for the 12 months ended December and compared to 50.4 cents/share previously. The group ended the year on December 31 with net cash of R2.24bn compared to R814.2m at end-December 2019.

Behind the numbers was the improvement in the PGM rand basket price which averaged R47,891.70 per platinum ounce – an increase of two-thirds year-on-year. There is nothing to suggest that the basket price has eased in the current financial year despite an improvement in the rand against the dollar.

The palladium price is about a fifth higher this year whilst platinum is up a shade under 20% for 2021.

Sibanye-Stillwater said in a first quarter production report that the realised basket price of PGMs was R52,722/oz – an increase year-on-year of 59%. It promised future windfalls from its PGM assets.