Photo by: Creamer Media Land Bank raising R3-billion liquidity facility. JOHANNESBURG (miningweekly.com) – The State-owned Land and Agricultural Development Bank of South Africa announced in an update on liquidity that it would be raising R3-billion and restructuring its debt.
The bank, headed by CEO Ayanda Kanana , stated in a stock exchange news service (SENS) notice that considerations on restructuring of debt remained ongoing and further updates would be provided on an ongoing basis.
Advertisement As a second phase, a repurposing strategy for the bank would be investigated and finalised. The bank stated that Rand Merchant Bank, a division of FirstRand Bank Limited, was acting as corporate finance adviser on the restructuring in a process that would involve raising a R3-billion liquidity facility from key funders as well as a liability solution to restructure funding obligations in a manner that would allow continued service of these obligations according to a profile that better matched its lending book, whilst not unduly impacting the financial outcomes for funders. It was likely that this process would result in the restructuring of maturities of funding obligations.
Advertisement Also being put in place would be an equity solution to ensure adequate equity support, in addition to the restructured liabilities, to allow the Land Bank to fulfil its legally mandated functions on a sustainable basis.
Negotiations around the liquidity facility were ongoing, with the process anticipated to be finalised within the next fortnight, depending on negotiations with providers of this facility.
The process around the liability solution had commenced, according to a laid down timetable extending from June 10 for the consideration of liability solution terms and mechanisms by the Land Bank and National Treasury and concluding on August 31. The repurposing strategy would likely be finalised by the end of September.
The objectives of the liability solution were to rid the existing events of defaults and cross defaults on the bank’s funding instruments; extend the term of all funding that had matured or would mature in the next 12 months to develop a more sustainable maturity profile, and provide existing funders with a credit-enhanced position subsequent to the implementation of the liability solution.
Advisers, the bank stated, were in discussions with various groups of funders to implement a funding restructure with broadly no loss of capital or accrued interest, extended credit-enhanced and repriced funding instruments and a voluntary tender and exchange process to holders of listed instruments to replace existing listed […]