A group of stakeholders has granted troubled AST Group a R60 million loan facility. AST says most of its interest-bearing debt will also be rescheduled as part of a plan to recapitalise the company.
The company`s recapitalisation plan also includes a rights offer. Cadtech, Kumba Resources and Standard Bank have conditionally agreed to underwrite the rights offer to a maximum of R88.75 million.
The rights offer, the proceeds of which are to be used to settle debt, will take place at 9c per AST share.
AST says the R60 million loan will be used for general corporate purposes, allowing management to focus on achieving cost reductions in terms of its business improvement programme, a turnaround strategy announced at the release of its interim results.
It will also allow management to focus on the recapitalisation of the business through the rights offer which AST says will take place no later than 8 September.
Among the lenders are Kumba Resources and Standard Bank.
CEO John Miller said in March that the board had implemented a "stringent business improvement and cost reduction programme" which had identified cost savings of at least R120 million on an annualised basis.
However, the full benefits of the programme are expected to be realised only in about 18 to 24 months.
AST is in the process of being restructured into a single business entity, with non-core business operations being sold or closed.
The AST share was trading 3c up at 12c on the JSE this morning.
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