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PPC faces watershed year

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World Cement,

Bloomberg is reporting that PPC is gearing up for a milestone year that CEO Darryll Castle said will determine the company’s future after the share price almost halved in 2016.

The impending start of production at plants in the Democratic Republic of Congo and Ethiopia will help transform PPC into a sub-Saharan African producer and it is essential they run smoothly and efficiently, Castle announced in an interview. The company needs to rebuild credibility with investors after it was forced to raise US$295 million in a rights offer earlier this year to service debt.

PPC is seeking to move on from a tumultuous year in which it negotiated a costly 2 billion rand bank guarantee and held a rights offer after S&P Global Ratings cut its credit rating to junk, triggering early redemptions by bondholders and raising liquidity concerns. The company’s debt had more than doubled over three years as it poured money into the new African projects while battling competition, slowing economic growth and falling prices in its home market.

The shares have dropped about 48% this year. The stock closed unchanged on Wednesday at 5.37 rand, giving the company a market value of 8.72 billion rand.

Castle was appointed CEO in January 2015 to replace Ketso Gordhan, who resigned after a fall out with other executives that led to an eventual shake-up of the board. The new plants, which also include operations in Zimbabwe and Rwanda, are a legacy from the previous management.

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