Harmony Gold has priced $500 million in guaranteed senior unsecured convertible bonds due in 2031 to optimise its funding profile and diversify capital sources.
The net proceeds will be used for general corporate purposes. Harmony expects to apply for the bonds to be admitted to trading on the Open Market segment of the Frankfurt Stock Exchange within 30 days of their issue.
The bonds will be issued at 100% of their principal amount and will carry a coupon of 1.5% a year. They will be redeemable at their principal amount on or around 29 September 2031.
The initial conversion price has been set at R418.60 ($25.7519), representing a 40% premium to the reference share price. Harmony's share price slipped 1.15% to R310.65 on the JSE Tuesday afternoon, a price much in line with the R318.01 that it traded at a year ago.
Citigroup and J.P. Morgan acted as joint global coordinators and joint bookrunners. Absa Bank, FirstRand Bank and Nedbank acted as co-lead managers.
“The offering reflects a proactive and disciplined approach to balance-sheet management from a position of strength. It enhances funding efficiency, diversifies our capital sources and optimises our funding profile,” Harmony chief executive Beyers Nel said.
“Our capital programme remains fully funded, and we remain confident in Harmony’s ability to continue creating long-term value for shareholders,” he said.
The bonds will be convertible into approximately 19.4 million Harmony ordinary shares, representing about 3% of the company’s issued ordinary share capital, subject to future adjustments.
Harmony may elect to deliver the underlying shares or use a net share-settlement option to limit dilution.
For the year ended June 30, 2026, Harmony increased headline earnings per share by 87% to 4 363 South African cents, or R43.63. The company said the increase was supported by a 35% rise in the average gold price received and contributions from its copper operations.
Gold production declined by 3% to 44 464kg, while the average gold price received rose by 35% to R2,069,710/kg.
Gold all-in sustaining costs increased by 13% to R1,191,698/kg.
Adjusted free cash flow rose by 54% to R17.148 billion, driven by the higher gold price and copper sales from the CSA mine following Harmony’s acquisition of MAC Copper.
Harmony said it had previously focused on portfolio progression and improvement but had now shifted its focus to executing its strategy and unlocking value from its assets.
The company expects a meaningful cash-flow inflection beyond 2030 as margins strengthen, costs decline and free cash flow expands.
Harmony’s net debt stood at R852m following the MAC Copper acquisition, compared with net cash of R11.1 billion previously. It had liquidity of R17.1bn, comprising cash and undrawn facilities, and had secured a new $500m and R7bn syndicated, multicurrency, multitranche funding package.
The funding is expected to reduce interest costs and extend maturities, strengthening Harmony’s funding profile, its directors saud.