Ashanti scraps note restructuring (July 08, 2002)

Ashanti Goldfields (ASL-N) has scrapped a proposed note restructuring, following a US$75-million, last-minute cash injection from 32%-owner Lonmin.

Instead, the African gold miner will implement an early cash redemption of US$218.5 million worth of outstanding 5.5% exchangeable guaranteed notes (plus accrued interest) due in March and US$48 million outstanding under its existing revolving credit facility.

The redemption will be funded via a US$315-million fund-raising effort, including US$40 million by the early exercising of certain warrants, a new US$200-million revolving credit facility, and the issuance, to Lonmin, of mandatorily exchangeable notes worth US$75 million.

Under the new plan, Lonmin will subscribe for the new shares at a price capped at US$5.40 apiece as part of a wider rights issue, the size of which has not been determined.

In a separate deal, Lonmin has granted the Ghanaian government, which has about a 20% stake in Ashanti, a call option to buy US$28.4 million worth of the new shares.