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August 2010 
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Lonmin Unveils $457m Rights Issue |
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Pauline Renaud, May 2009 |
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(11 May 2009)
Lonmin Plc, the world’s third largest platinum producer, has unveiled a $457m rights issue on Monday in order to bolster its balance sheet after it reported a first-half loss and scrapped its dividend. “A rights issue puts our capital structure in the robust state that we feel is necessary given the uncertain times we’re operating in,” chief executive Ian Farmer said in an interview with Reuters.
The company said it would issue 35 million new shares at £9 a share to cope with the fluctuating platinum prices and dollar-rand exchange rates, and to reduce debt. Shareholders Xstrata Plc and M&G agreed to take 12.6 million new shares, or 36 percent of the total on offer, Lonmin said today in a statement.
Mr Farmer has suspended some operations in South Africa and cut about 6400 jobs in the period.
Lonmin also said last month it completed a $575m debt-refinancing arrangement. But “even after the recent measures to improve operational performance, Lonmin’s profitability and cash flows are under pressure,” the company said in a statement.
Besides the cash call, the miner reported a $196m pre-tax loss in the six months to the end of March, against profits of $396m in the same period last year. Its revenue fell from $907m to $423m. Platinum’s average price dropped 43 percent during the first half, as the economic crisis negatively impacted sales of cars, the main source of platinum demand.
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