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Harmony mines the stock market
Brendan Ryan | Fri, 08 May 2009 08:52
[miningmx.com] -- HARMONY is now debt-free following receipt of US$169m from the Pamodzi Resources Fund (PRF) on April 20 and a R938m capital raising completed in early March.
”The proceeds from the capital raising and the Rand Uranium transaction totalling R2.7bn will be used to repay Harmony’s convertible bond due in May 2009 and its short-term debt leaving a positive cash balance of approximately R1.6bn," Harmony CEO Graham Briggs said this morning.
“We have positioned the company in such a way that we are able to deliver on our promise of paying a dividend in future. Our focus now remains on achieving our overall targets and delivering consistent returns,” he said.
The March share placement followed on from an earlier share placement in December through which Harmony raised R979m.
On both occasions the share placements have been almost perfectly timed to take advantage of periods of strength in the Harmony share price which currently sits well below the levels at which the placings were made.
In December, Harmony placed 10.5m shares at an average price of R93.20 and no sooner had it done so when the company’s share price pulled back below R85.
The second capital raising was carried out between February 10 and March 6 with 7.5m shares issued at an average subscription price of R124.45 to raise R938m.
The current Harmony share price is once again back below R85 and is currently sitting around R83.50 after a period during which the Harmony share price has badly underperformed those of rivals Gold Fields and AngloGold Ashanti.
Briggs commented Harmony had exploited “favourable market conditions” and the cumulative shares issued through the two placings amounted to R1.9bn or 4.5% of the group’s issued capital.
The money received from PRF was the second tranche of the total amount of $348m due for the sale of uranium and gold assets that used to be part of Harmony’s Randfontein mine and are now part of the Rand Uranium joint venture in which Harmony holds a 40% stake.
