PPC reschedules DRC cement plant debt

Construction materials provider PPC has further improved its liquidity position by finalising a capital repayment moratorium with funders of the group’s Democratic Republic of Congo (DRC) operation, limiting PPC’s capital requirements to only interest payments from January this year to January 2020.

PPC owns 69% of PPC Barnet DRC, while its local partner, Barnet Group holds 21% and the International Finance Corporation (IFC) 10%.

PPC Barnet DRC has completed the construction of its one-million-tonne-a-year integrated cement plant for around $300-million. The plant is near Kimpese in the Kongo Central province in western DRC, 230 km south-west of the capital Kinshasa.

The new cement plant is 60% project debt funded by the IFC and Eastern and Southern African Trade and Development Bank (TDB).

PPC has first sponsorship obligation under a project funds and share retention agreement.

An agreement has now been reached with the IFC and TDB regarding their scheduling of the project’s debt, with PPC granted a two-year capital repayment moratorium.

An additional interest rate spread of 2.5% has also been negotiated, making the new rate six-month London Interbank Offered Rate, plus 975 basis points.

“This latest development is a major achievement in addressing our capital structure. The rescheduling of debt firstly reduces the capital requirements by PPC Barnet DRC from PPC.

“Secondly, it will improve cash flows for the DRCbusiness which, in turn, will allow the business additional liquidity during this ramp-up phase,” PPC CFO Tryphosa Ramano explained.