After improving its financial and capital allocation, Sibanye’s credit rating has been upgraded to Ba2.
Moody’s has upgraded Sibanye Stillwater’s corporate family rating from Ba3 to Ba2, noting that the company’s credit rating has a positive outlook.
“I believe the upgrade is well deserved, considering the financial and capital allocation discipline that we have instilled in the business,” Sibanye Stillwater CFO Charl Keyter says.
This comes after the precious and battery metals miner used the excess free cash flow it received from record PGM prices in 2020 to pay off its debt. “A huge effort went into this,” Charl explains. “Firstly, continued engagement and education of credit ratings agencies on the company’s strategy and operational execution. Secondly, on the financial disciplines and capital allocation to pay down debt, restructured debt, shareholder returns and funding of the strategy.”
And Sibanye doesn’t plan to end there. “We hope to get into the investment grade bucket,” Charl says. However, he explains that this will depend on a few things, including the company’s performance. “I would argue that our performance already supports an investment grade rating, but this is also reliant on the sovereign credit rating of South Africa, an area where the country is not performing at its best.”
He adds that better credit ratings ultimately translates into better credit and lending rates and recognition by shareholders for financial prudence.
