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Lonmin launches rights issue at 94% discount as losses widen

Mon, 09th Nov 2015 10:13

(ShareCast News) - Beleaguered platinum miner Lonmin has launched a $407m (£270m) rights issue - a 94% discount to its share price last week - as it struggles to keep afloat amid declining platinum prices and rising costs.Shareholders will be able to subscribe for 46 new shares for each Lonmin share they own at 1p per share.Lonmin had already warned that the shares would be issued at a "significant discount" and the company said on Monday that its lenders would not refinance its debt unless the rights issue was approved.Chief executive officer Ben Magara said: "I am pleased that we have secured $370 million of bank facilities from all 10 of our existing lending banks which is conditional on the $407 million rights issue."It is encouraging that our rights issue has been fully underwritten and we hope shareholders vote positively on 19 November 2015."At 1050 GMT, shares in the miner were up 11.8% at 18.17p.RBC Capital Markets, which attributed the surge in the share price to relief, said the discount was deeper than it had expected but not overly surprising given the challenging spot the company finds itself in.Also on Monday, Lonmin reported $2bn in operating losses for the year to the end of September compared with $255m a year ago. This incuded $1.8bn in asset impairments on the back of lower-than-expected production and prices.The pre-tax loss for the full year widened to $2.2bn from $326m the previous year and net debt increased to $185m at the end of September from $29m in the same period in 2014.CEO Magara said: "2015 has been a tough year for Lonmin given the adverse pricing environment and the imminent maturity of our debt facilities in mid 2016."Our priority is to run the business with a focus on cash generation and profitable ounces. We are repositioning Lonmin and aiming for the business to generate positive free cash flow after capital expenditure in this current low environment."Taking what he admitted was a "somewhat unscientific look" at share consolidations by other companies, analyst Chris Beauchamp at IG suggested Lonmin's hopes were not hugely improved by the move.Six months after their own consolidation in June 2014, Rexam's shares were down 15%; six months after a November 2014 consolidation Johnston Press was down 16%; after its reverse share split in June 2014 RBS was down 40% a half-year later; after its own in 2012, Premier Foods was down 27%; and following its reshuffle in February last year IMI's shares fell 12% by August."It's not exhaustive, but rather instructive that Lonmin might not be saved," Beauchamp said.

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21 Oct 2015 09:56

Lonmin rallies on debt restructuring plans

(ShareCast News) - Lonmin shares rallied as investors welcomed the platinum miner's announcement of a rights issue and debt restructuring to combat declining prices. The company said it plans to raise around $400m (£259m) in gross proceeds through a rights issue and at the same time, it will amend i

21 Oct 2015 08:36

UPDATE 2-Lonmin aims for $400 mln rights issue, proceeds with job cuts

* Lonmin proposes rights issue exceeding market cap * Plans to push through with 6,000 job cuts * Shares up 7 percent (Adds detail, shares, Citi quote) By Ed Stoddard JOHANNESBURG, Oct 21 (Reuters) - Platinum producer Lonmin plans a $400 million rights issue of new sha

21 Oct 2015 07:56

South Africa's PIC backs Lonmin $400 mln rights issue

JOHANNESBURG, Oct 21 (Reuters) - South Africa's Public Investment Corporation, its state pension fund, supports Lonmin's $400 million equity cash call, the platinum company said on Wednesday as it unveiled a survival plan that also included debt refinancing. "The Public Investment Corporat

21 Oct 2015 07:52

Lonmin To Raise USD400 Million In Rights Issue, Warns Of Job Cuts (ALLISS)

21 Oct 2015 06:30

Lonmin aims for $400 mln rights issue, proceeds with job cuts plan

JOHANNESBURG, Oct 21 (Reuters) - Platinum producer Lonmin plans a $400 million rights issue and will proceed with a planned restructuring to cut 6,000 jobs in the face of depressed prices, it said on Wednesday. Lonmin also said in a statement that it had slashed its capital expenditure fo

14 Oct 2015 14:11

South Africa's Zuma suspends head of police pending probe

JOHANNESBURG, Oct 14 (Reuters) - South African President Jacob Zuma has suspended National Police Commissioner Riah Phiyega, pending an inquiry into allegations of misconduct, his office said on Wednesday. Zuma's office in September launched an investigation into the police chief's role in

13 Oct 2015 08:43

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30 Sep 2015 08:32

BROKER RATINGS SUMMARY: Goldman Sachs Resumes Rolls-Royce At Buy

30 Sep 2015 08:25

S.Africa hopes to settle with 'Marikana massacre' victims - Zuma

JOHANNESBURG, Sept 30 (Reuters) - South Africa may set up a panel to process civil claims that have been filed against the government by the families of miners killed during a violent 2012 wildcat strike at a mine run by platinum producer Lonmin , the presidency said. "A judge, assisted by

24 Sep 2015 06:00

VW scandal could end platinum's price supremacy over palladium

* Pt/Pd ratio graphic: http://link.reuters.com/fyg99v * Consumption graphic: http://link.reuters.com/qew65w * Platinum hits 6-1/2 year lows after VW emissions scandal By Clara Denina LONDON, Sept 24 (Reuters) - Platinum's price dominance since 2001 over sister metal pallad

22 Sep 2015 16:13

REFILE-UPDATE 1-S.Africa's Zuma starts probe on police chief over "Marikana massacre"

(Fixes name spelling in para 8) JOHANNESBURG, Sept 22 (Reuters) - South African President Jacob Zuma has launched an investigation into the police chief's role in the 2012 killing of 34 miners by officers during a strike over pay, his office said on Tuesday. South Africa's worst polic

22 Sep 2015 13:46

S.Africa's Zuma starts probe on police chief over "Marikana massacre"

JOHANNESBURG, Sept 22 (Reuters) - South African President Jacob Zuma has launched an investigation into the police chief's role in the 2012 killing of 34 miners by officers during a strike over pay, his office said on Tuesday. South Africa's worst police killing since the end of apartheid s

18 Sep 2015 15:55

LONDON MARKET CLOSE: Stocks Down As Fed's Hold Creates Uncertainty

18 Sep 2015 08:37

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16 Sep 2015 17:04

Broker tips: Mondi, Lonmin, Reckitt Benckiser

(ShareCast News) - Mondi, the paper and packaging group, has been downgraded to 'sell' by Goldman Sachs after a strong run in the shares and "stretched" growth expectations. Goldman said it saw 12% downside to shares in the FTSE 100 group, which was spun-off from miner Anglo American in July 2007, a

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