Lonmin Shareholders Approve US$817M Rights Issue

PUBLISHED: 19 Nov 2012 @ 17:06 | Comments (0) | More info about Kenneth G. Mondero

Shareholders of leading platinum producer, Lonmin plc (LSE:LMI) approved the proposed rights issue to raise funds needed to rehabilitate the company’s balance sheet following the multi million pound losses incurred during the tragic events at its South African mines.

In a statement early afternoon today, world’s number three platinum miner said about 91.1% of the shareholdings representing 77.7% of the firm’s issued share capital voted in favour of the rights issue expected to raise some US$817 million (£513 million) gross to be used to pay off debts and keep the company running.

Lonmin’s net debt as at 31^st October 2012 was US$550 million while the company suffered pre-tax loss of some US$698 million for the full year ending on 30^th September 2012.

The rights issue will see an additional 365 million new shares, or 64.3% of the enlarged share capital, priced at 140 pence per share – a huge discount to Lonmin’s share price closing of 452.80 pence the day prior to the announcement of the capital raising.

Shares of the company trading on the London Stock Exchange closed 8.5% higher than yesterday’s price, to 511.50 pence, after hitting as high as 518 pence following the announcement.

Moving Forward

The highly publicised labour unrest that swept South Africa’s mining sector saw not only the loss of hundreds of millions of pounds but lives of 34 Lonmin employees and several others who were pinned during the violent strikes last August 2012.

A minute of silence was offered to the lost employees during the company’s general meeting convened to vote for the proposal earlier today.

Lonmin intended to close the horrid chapter of its mining operations at the Marikana mines when it published its full year results along with the proposed rights issue and presented a renewal plan to provide the firm with a fresh start following the tragic events during the end of the 2012 fiscal year.

“The Board thanks its shareholders for their support and looks forward to continuing its dialogue with them,” extended Chairman Roger Phillimore.

“We can now move forward, with confidence, in continuing our delivery of the Lonmin Renewal Plan.”

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