FACTBOX-Big miners say have enough credit amid crisis
Wed Oct 8, 2008 8:08am EDT
reuters.com
Oct 8 (Reuters) - Major mining groups have adequate credit facilities despite loan markets freezing up, they said on Wednesday, though they declined to say how much interest costs would rise due to the global credit crisis.
Rio Tinto Plc/Ltd (RIO.L: Quote, Profile, Research, Stock Buzz)(RIO.AX: Quote, Profile, Research, Stock Buzz) had the heaviest debt load among major diversified mining groups based on its gearing ratio -- long-term debt divided by capital -- of 54 percent.
This compares to gearing of 34 percent for Brazil's Vale (VALE5.SA: Quote, Profile, Research, Stock Buzz), 30 percent for Anglo-Swiss Xstrata (XTA.L: Quote, Profile, Research, Stock Buzz) and 17 percent for both Anglo American (AAL.L: Quote, Profile, Research, Stock Buzz) and BHP Billiton (BLT.L: Quote, Profile, Research, Stock Buzz) (BHP.AX: Quote, Profile, Research, Stock Buzz), according to Reuters data and company reports.
Following is a summary of the debt position of major groups:
RIO TINTO
The group had $42 billion in net debt at end June, after taking on $40 billion in debt to buy U.S. aluminium producer Alcan last year, but the group said it is happy with its debt servicing costs.
"Rio is relatively comfortable," said spokesman Robin Walker. "They are in quite good shape because they are paying interest on their debt of less than 50 points over LIBOR, which is very competitive."
By comparison, recent loans to other companies such as EDF (EDF.PA: Quote, Profile, Research, Stock Buzz) to fund its takeover of British Energy (BGY.L: Quote, Profile, Research, Stock Buzz) have been agreed at margins of more than 100 basis points over LIBOR.
Walker said the next tranche of Rio's debt which is due is $8.8 billion in October 2009, which he said Rio would be able to pay off easily since it is in the midst of a $15 billion disposal programme.
Rio has also been generating strong cash flow of $1.5 billion each month in the first half, he added.
XSTRATA
Xstrata dropped plans to make a $10 billion bid for No. 3 platinum producer Lonmin (LMI.L: Quote, Profile, Research, Stock Buzz) last week, citing unfavourable terms for a $15 billion financing package.
But the group said at the same time it had agreed a $5 billion three-year multi-currency revolving loan facility to refinance existing debt and for general corporate purposes.
It declined to provide further details about the new loan, such as the margin.
BHP BILLITON
BHP declined to say whether it had loans due for refinancing, but spokesman Illtud Harri noted it was one of the least-geared mining groups with net debt of $8.5 billion and had healthy cash flows.
Its annual financial statements in June showed $3.37 billion of loans were due for payment in one year or less.
BHP has already agreed a $55 billion loan with a consortium of banks for its all-share takeover offer for Rio Tinto, to refinance Rio's $40 billion Alcan debt and to help pay for a promised $30 billion share buyback.
ANGLO AMERICAN
Anglo American Plc (AAL.L: Quote, Profile, Research, Stock Buzz) has stepped up borrowing this year to pay for acquisitions, such as two Brazilian iron ore projects that cost $5.5 billion, but said it had no debt that needed to be renegotiated in the near term.
"We have committed facilities to support our short term debt obligations and we manage our capital structure on an ongoing basis," said spokesman James Wyatt-Tilby.
"Over the last 12 months we have issued capital market debt instruments and put in place committed funding lines to meet our ongoing financing requirements."
VALE
Vale's Chief Executive Roger Agnelli said on Sept. 26 that the firm, the world's biggest iron ore producer, was well placed to cope with the global financial crisis. [ID:nN26425558]
(Editing by David Holmes) |
