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London - Lonmin [JSE:LON], the world’s third-largest platinum miner, seeks to raise $400m selling new shares to existing holders as it moves to stave off concerns its debt is unmanageable amid a slump in prices for the precious metal.
The company, down 84% in London trading this year, also agreed to new debt facilities totalling $370m that mature in 2020, it said in a statement. The terms of the share sale will be announced on November 9.
The two measures “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 metals pricing environment,” the company said.
Lonmin took the action following a business review designed to help it combat weak prices. The Public Investment Corporation, which holds about 7% of the stock, will support the sale and - subject to approvals - may underwrite a “material portion” beyond its entitlement, Lonmin said.
The company on Wednesday confirmed its July estimate that 6 000 jobs will be cut as part of the restructuring, which is expected to be completed by September next year at a cost of R800m ($60m).
READ: Lonmin says 6 000 jobs at risk in proposed restructuring
