Share

Lonmin prices rights issue at 1 pence a share

Johannesburg - Platinum producer Lonmin [JSE:LON] on Monday priced its R5.78bn rights issue at a 94% discount as the firm fights for survival in the face of depressed commodity prices.

Lonmin said it would sell 27 billion shares at one pence each to its shareholders, compared to the stock's last trading price of 16.25 pence on the London Stock Exchange on Friday.

The company had flagged that the equity cash call would be issued at a "significant discount", underscoring a 90% tumble in its stock price this year.

Battered by strikes, rising costs and weak platinum prices, Lonmin said last month it planned to raise the money and another R5.26bn in bank loans to refinance debt due in May 2016.

Lonmin has urged shareholders to approve the equity cash call at a meeting on November 19, saying the injection is crucial to its survival.

The company said that if shareholders did not approve the rights issue, lenders would not provide the loans to push back the maturity of the 2016 debt to 2020.

Lonmin said that South Africa's Public Investment Corporation, which owns about 7% stake of the company, had committed to take up its full entitlement and has "sub-underwritten a material portion of the proposed rights issue in excess of its entitlement".

Lonmin had to rely on an R11.36bn rights issue to shore up its battered balance sheet in November 2012.

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
19.04
-0.7%
Rand - Pound
24.02
-0.5%
Rand - Euro
20.53
-0.3%
Rand - Aus dollar
12.36
-0.1%
Rand - Yen
0.13
-0.7%
Platinum
900.15
+0.4%
Palladium
1,000.00
-0.2%
Gold
2,212.54
+0.8%
Silver
24.59
-0.2%
Brent Crude
86.09
-0.2%
Top 40
68,094
+0.6%
All Share
74,290
+0.5%
Resource 10
56,964
+2.3%
Industrial 25
103,585
+0.3%
Financial 15
16,463
-0.4%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders