Bloomberg News

PIC, Afrisam Bondholders Agree on Afrisam Reorganization

December 12, 2011

(Updates with bondholders’ comment starting in second paragraph.)

Dec. 9 (Bloomberg) -- The Public Investment Corp. and most holders of 1.03 billion euros ($1.4 billion) of Afrisam Ltd. bonds due in 2012 agreed to a reorganization of the debt, saving South Africa’s second-largest cement maker from collapse.

The PIC and 80 percent of the noteholders, including Pembani Group (Pty) Ltd. and BlackRock Advisors (U.K.) Ltd., agreed to the restructuring, the Pretoria-based PIC and other bondholders said in a joint e-mailed statement today. Afrisam is not yet part of the agreement, they said.

Afrisam’s existing debt position will be “materially reduced by” more than 15 billion rand ($1.85 billion), the companies said. “Afrisam will become a much stronger business with a de-levered capital structure and sufficient liquidity to meet the challenges of the current economic climate and beyond.”

Bunker Hills Investments Ltd., the largest shareholder in Johannesburg-based Afrisam with a 37 percent stake, on Dec. 2 lost a court bid to block the PIC, Africa’s largest money manager, from converting preference shares in Afrisam into equity. The PIC currently owns 20 percent of Afrisam and will now convert its claims against Afrisam, giving it and Pembani, formerly known as Worldwide African Investment Holdings Ltd., 95 percent of the cement maker.

The remaining 5 percent of the business will be offered to junior debt holders, including Bunker Hills and Holcim Ltd., if they agree to the reorganization, the bondholders said.

Holcim, the world’s second-largest cement producer, helped create Afrisam in 2006 when it sold most of its business to Bunker Hills and other investors for a total of 23 billion rand, most of which was funded with debt. Holcim, based in Jona, Switzerland, retained a 15 percent stake.

Other noteholders, including BlueBay Asset Management Ltd., Marathon Asset Management LP and Noonday Asset Management LLP also agreed to the restructuring, the bondholder said.

--Editors: Hilton Shone, Gordon Bell

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net


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