PPC Ltd terminates S&P Global Ratings contract

Pretoria Portland Cement Limited has successfully completed the repayment of its Bond Program.

The repayment was concluded on October 31, 2019.

The giant cement producer also said it had terminated its earlier arrangement with ratings firm S&P Global Ratings.

“PPC wishes to inform shareholders that it successfully completed the repayment of the Bond Program on October 31, 2019 and subsequently terminated the rating service agreement with the ratings agency S&P Global Ratings,” said the group.

S&P had since confirmed the development in a research update released on January 13, 2020 and in accordance with internal procedures.

That update carried the ratings agency’s view on the ratings of PPC following the interim results released by PPC on the Stock Exchange News Service on November 20, 2019.

Part of the S&P Global’s research reads:

“On Jan. 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 amortizing 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 ratings agency.

In response to S&P’s commentary, PPC indicate it will, among other things, initiate a process to review the overall capital structure of the Group with the aim to improve the debt maturity profile. This process is reportedly underway and PPC will inform the market as relevant developments become available.

According to the ratings agency’s website, S&P Global “provides intelligence that is embedded into the workflow and decision-making of customers around the globe.”

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Byron Adonis Mutingwende