PPC in $253 mln capital raise, sweats over possible credit downgrade

PPC in $253 mln capital raise, sweats over possible credit downgrade

HARARE, May 31 (The Source) – The local unit of South African cement maker Pretoria Portland Cement (PPC) is planning to raise up to R4 billion ($253 million) to pay off debts and to fund current investment projects.

PPC is constructing a $75 million plant in Harare which will have capacity to produce 680,000 tonnes annually which is due to come online later this year.

The capital raise move is part of a strategy to review its balance sheet to pay for debts due this year and next year, which it said would put it in good stead to execute its strategy.

In the integrated report for 2015, PPC listed its net borrowings at R1,8 billion ($114 million).

PPC said it will release the details of the fundraiser o June 14 when it expects to release full year financial results.

The company is also sweating on a possible credit downgrade from a credit rating agency this year.

“Arising from its current and ongoing engagement with a particular credit ratings agency, PPC has reason to believe that the outcome of this engagement is a probable credit rating downgrade of PPC,” PPC said in a cautionary statement to shareholders on Tuesday.

“We will advise our shareholders and other stakeholders of the outcome such engagement as soon as a final decision has been made by the aforesaid credit ratings agency. The capital raising exercise will support the debt rating of PPC.”