Lonmin.
LONMIN, the world’s third-largest platinum producer, will raise $400m in a rights issue and put in place an amended debt facility for $370m before the end of the year.
Lonmin has existing debt facilities of $543m, which mature in May and June next year, and the amended debt facilities, which will mature in May 2020, will be conditional on the company raising the $400m in a rights issue.
Credit committee approval is also needed to secure the amended debt facilities.
"The board believes that the proposed rights issue and the amended debt facilities taken together will strengthen the business and provide the group with sufficient resources for working capital and capital expenditure to sustain the business in an ongoing low platinum group metal pricing environment," the company said in a statement on Wednesday.
The terms of the rights issue will be made known and underwritten on November 9. The board wants to conclude the rights issue before the end of the year and will hold a shareholder meeting on November 19 to vote on the proposal.
The Public Investment Corporation, which owned about 7% of Lonmin, had said it would take up its entitlement and contribute to underwriting the rights issue, Lonmin said.
In the year to end-September, Lonmin sold 751,560oz of platinum, which was above its guidance of 730,000oz.
Lonmin would set aside R800m to restructure its business in a process that would affect 6,000 jobs by September next year. So far, 1,550 people had left Lonmin through a voluntary separation process and early retirement.
Lonmin would generate sales of about 700,000oz of platinum in its 2016 financial year, falling to 650,000oz for the following two years as its restructuring, including the closure of high-cost shafts took effect.
