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Lonmin Share Chat (LMI)

Share Price: 75.10Bid: 73.70Ask: 74.00Change: 0.00 (0.00%)No Movement on Lonmin
Spread: 0.30Spread as %: 0.41%Open: 75.10High: 0.00Low: 0.00Yesterday’s Close: 75.10

Share Discussion for Lonmin

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Posts: 2,381
Opinion:No Opinion
19 May '19
100notout: I enjoyed reading this interesting and well argued post. The areas with which I disagree concern their debt position and redundancy requirements. The streaming deal was done to enable the bid to go ahead, it’s very expensive financing otherwise. And they’re way behind on redundancies, not because they think they will need these people in future, but because they can’t afford to sack them before the bid goes through - Jabba has always insisted he won’t buy Lonmin if it has net debt. I don’t think, even at these PGM prices, that an independent Lonmin is viable beyond the year end.

Your account of Lonmin’s history is almost comical, isn’t it? A litany of mismanagement. I think institutional shareholders will mostly vote in favour of the bid.

Meanwhile, AMCU is consulting with its legal and other advisers on the text of the Competition Appeal Court judgment.. I think it’s more likely that Amcu will use the wage negotiations with Lonmin to make their point, rather than try to make a further appeal, to the Constitutional Court - though this must surely be what they’re looking at with their advisers. I dare say Uncle Joe would prefer to rub Jabba’s nose in it with a strike in the platinum mines, rather than enable him to get out of the deal. The gold mines strike, which Sibanye claimed at the time was having a limited effect, seems to have been a disaster for them really. A platinum mines strike would be much worse and could even result in Jabba’s ouster.

As for historical inevitability, it’s all about timing, isn’t it? if Jabba has got his timing wrong in his recent and current purchases, Sibanye could get into serious trouble.
Posts: 422
Opinion:No Opinion
19 May '19
Are playing hard ball and it could be their misfortune. They originally offered the equivalent of £1.00 per share 17 months ago. They have to take ownership of why their share price has fallen. The gold operations have been poor with numerous casualties, they have had a prolonged strike which has caused bad blood with AMCU and they are highly leveraged. They have recently raised cash and last year issued a scrip dividend which in turn gives LMI holders a smaller percentage than was originally agreed with the Board. When the offer was made LMI had banking covenants that were becoming a concern for investors, they don't have them now and since the offer was made the PGM basket has risen and the need to make mass redundancies has reduced. I believe LMI under the right guidance could have a very bright future for all stakeholders. If I can see that this deal is flawed I am certain that others can see the same and lets not forget the heavy write down of assets, this seems suspect to me as confirmed by the Petrozim transaction which was written down to zero and within a year being sold for north of $22m. A new Board with vision and determination could do wonders here. When you take out the cash and the Furuya investment the remainder of the company is being valued at circa £100m. Ten years ago the LMI Board rejected a bid for $10Bn and have since raised $1.7Bn in the form of rights issues. This is not the time to throw in the towel. When the Pt cycle changes and it will because history tells us it will holders will be glad they didn't accept this low ball offer from SGL. This was merely an option for SGL and if certain factors went against LMI they would have pulled out or offered an even lower bid because that's how they operate. The overall landscape for LMI has vastly improved and the institutions need to take a long look and do what's in the best interest for all stakeholders... GLA LMI holders.

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