De Beers set to secure $1bn from owners
DIAMOND miner De Beers is understood to have convinced its owners – Anglo American, the Oppenheimer family and Botswana’s Debswama Mining Company – to inject $1bn (£646m) into the firm via a share placing.
De Beers was forced to ask for financial assistance from its shareholders after the diamond market hit its worst period since the 1980s. It is trying to refinance a loan of $1.5bn due in March.
The diamond miner is also in talks with its banks over restructuring its balance sheet.
“We are currently in discussions with our banks… These have been positive and productive discussions and we are entirely confident about our ability to renew the financing,” De Beers said yesterday.
Anglo American and the Oppenheimer family were unavailable for comment.
De Beers, the biggest diamond company in the world, has been forced to shut mines this year as the price of the precious jewel plummeted on the back of the downturn. Last week, the group’s managing director Gareth Penny said sales were 47 per cent below last year’s levels.
De Beers is 45 per cent owned by Anglo and 40 per cent owned by the Oppenheimers, while the rest is owned by Debswama.
In proportion to their equity, Anglo would inject $450m, with the Oppenheimers and Debswama stumping up $400m and $150m respectively.
As well as the $1.5bn debt facility due in March, the miner has a further $2bn of debt due in 2012. Anglo – which this year rejected a merger bid from rival Xstrata – has a net debt of $11.3bn. It is now under pressure to prove it can provide value for its investors without Xstrata’s help.