Northam Platinum Limited

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Northam Platinum Limited (2021-12)
  • Northam Platinum Limited
  • Year : Dec 2021
3 Tokens
USD 300.00

In order to facilitate a new composite empowerment structure, Northam became a wholly owned subsidiary of a new listed parent company Northam Platinum Holdings Limited in September 2021 through a share swap scheme. In GCR’s view this action has no implication on Northam’s credit fundamentals. GCR expects that Northam’s cash generation and profitability will continue to display a strong positive trajectory, led by high platinum group metals prices and rising lower-cost production volumes. Northam reported operating profit of R16.1bn, 3x higher than the FY20 level, with the margin buoyed to 49% (FY20: 30%).

Additional Information

The Positive Outlook reflects the potential for Northam’s ratings to be upgraded over the next 24 months as the group is expected to generate much stronger free cash flows, led by higher production volume and favourable commodity prices, which should build up large cash reserves and facilitate lower debt levels. The ratings could be raised if, in line with our expectations, strong positive free cash flow generation reduces gross debt, resulting in a net cash position and stronger liquidity headroom, with sources covering uses by at least 2.0x on average over 24 months under conservative pricing assumptions.

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