Acting Business Editor
LISTED cement manufacturer, Pretoria Portland Cement (PPC) says it has successfully completed repayment of a Bond Programme.
In a statement issued on the Zimbabwe Stock Exchange to shareholders early this week, PPC said as result of the completion of the bond repayment initiative in October last year, it subsequently terminated the rating service agreement with the ratings agency, S&P Global Ratings.
“PPC wishes to inform shareholders that it successfully completed the repayment of the Bond Programme on October 31, 2019 and subsequently terminated the rating service agreement with the ratings agency S&P Global Ratings,” it said.
The agency had already confirmed the development in a research update released on Monday and in accordance with internal procedures.
“On January 13, 2020, S&P Global Ratings withdrew its South Africa national scale issuer credit ratings on PPC Ltd at the company’s request.
“Our ratings on PPC reflected our view of the company’s established brand presence and market position in South Africa and its other African operations.
“However, persistent macroeconomic risks and intense competition across PPC’s portfolio has affected its return on capital and free cash flows, dampening debt-reduction prospects.”
Furthermore, the company is yet to refinance its largely amortising debt maturity profile, which could pressure liquidity further.
“The ratings on PPC at the time of withdrawal reflected the weak trading environment across the company’s portfolio and risks on re-profiling its debt maturities,” said the S&P Global Ratings.
In response to S&P’s commentary, PPC said it will among other issues, initiate a process to review the overall capital structure of the group with the aim to improve the debt maturity profile. — @okazunga.