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Lonmin paints bleak picture as it calls on shareholders to back takeover

Mon, 25th Mar 2019 13:23

(Sharecast News) - Lonmin issued a stark warning on Monday, telling investors it does not have the funds needed to sustain the business long-term, and urged them to back a takeover offer from rival miner Sibanye-Stillwater.Updating on trading ahead of the annual general meeting, the platinum specialist said it had returned to profitability in 2018. It also hailed a successful refinancing during the period.But the group, which is dual-listed in London and Johannesburg, warned that the first half of the current year had been weaker, with "poor production and correspondingly high unit costs" offsetting the benefits of improved prices for platinum group metals. The price of platinum has dropped around 45% over the last five years.It said: "We continue to be financially constrained and unable to fund the significant investment required to sustain our business and associated employment in the future."The challenges facing Lonmin and the industry persist. The company is a single asset producer in a single asset geography and remains exposed to inflationary cost pressures as well as volatility in pricing and exchange rates."This, together with our current year performance, continues to underscore the vulnerability of our business the importance of a sustainable long-term solution for the company. This is why your board recommends the all-share offer from Sibanye-Stillwater."South Africa's Sibanye-Stillwater made the £285m all-stock offer for Lonmin in December. Lonmin said the combination of the two businesses would create a "larger, more diversified and resilient company better able to withstand market volatility and business disruptions".However, the deal has been held up because of legal proceedings over industrial action at platinum mines operated by Sibanye-Stillwater.Shares in Lonmin perked up on the update, and were ahead 11% at 1400 GMT at 78.95p.

More News

8 Feb 2016 13:51

UPDATE 1-South African platinum sector girds for wage talks, pleads poverty

* Amplats, Impala and Lonmin gear up for talks in June * Platinum price down around 30 pct year-on-year * Union says aware sector struggling but will fight for workers (Adds AMCU comment) By Ed Stoddard and Zandi Shabalala CAPE TOWN, Feb 8 (Reuters) - The world's top pla

8 Feb 2016 12:30

South African platinum sector girds for wage talks, pleads poverty

* Amplats, Impala and Lonmin gear up for talks in June * Platinum price down around 30 pct year-on-year By Ed Stoddard and Zandi Shabalala CAPE TOWN, Feb 8 (Reuters) - The world's top platinum producers, which are losing money as costs soar and prices sink, are pleading poverty

5 Feb 2016 09:30

BROKER RATINGS SUMMARY: Barclays Cuts Enterprise Inns To Underweight

2 Feb 2016 17:28

Police watchdog recommends charges against South African police commissioner

JOHANNESBURG, Feb 2 (Reuters) - South Africa's police watchdog has recommended that suspended national commissioner Riah Phiyega should face criminal charges for defeating the ends of justice, local media reported on Tuesday. Phiyega, the top-ranking police official when police killed 34 st

29 Jan 2016 16:47

Friday broker round-up

(ShareCast News) - Experian: Exane BNP Paribas upgrades to outperform with a 1350p target. Mitchells & Butlers: JP Morgan downgrades to neutral with 370p target, down from 420p Dcc: Exane BNP Paribas promotes to outperform with 6200p target. Lonmin: HSBC upgrades to buy, target 76p; Deutsche reite

29 Jan 2016 12:13

Broker tips: Lonmin, FirstGroup, Sky

(ShareCast News) - After a poor share price performance, HSBC has upgraded Lonmin from 'hold' to 'buy' but has cut its target price from 135p to 76p. The company's first quarter production report out on Thursday was mixed, according to the investment bank. "Safety stoppages impeded production momen

29 Jan 2016 10:24

Lonmin upgraded by HSBC on poor share performance

29 Jan 2016 09:34

BROKER RATINGS SUMMARY: Shore Capital Upgrades Sky To Buy From Hold

29 Jan 2016 08:15

LONDON BRIEFING: James Murdoch Back As Chairman Of Sky

28 Jan 2016 08:59

Lonmin Platinum Production Rises As Workforce Reduction Progresses

28 Jan 2016 08:39

UPDATE 1-Platinum producer Lonmin cuts jobs and costs

(Adds detail) JOHANNESBURG, Jan 28 (Reuters) - Lonmin said on Thursday it would continue to review its services and reduce costs, mainly through job cuts, as the sliding price of platinum bites further. The company said labour costs fell 194 million rand ($11.8 million) in the last th

28 Jan 2016 07:56

Platinum producer Lonmin cuts jobs and costs

JOHANNESBURG, Jan 28 (Reuters) - Platinum producer Lonmin will continue to review its services and reduce costs, mainly through cutting jobs, as the slide in the price of its main commodity bites further. The company said labour costs fell 194 million rand ($11.8 million) in the last three

22 Jan 2016 16:03

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Lonmin Share News (LMI)

Lonmin paints bleak picture as it calls on shareholders to back takeover

UPDATE 1-South African platinum sector girds for wage talks, pleads poverty

South African platinum sector girds for wage talks, pleads poverty

BROKER RATINGS SUMMARY: Barclays Cuts Enterprise Inns To Underweight

Police watchdog recommends charges against South African police commissioner

Friday broker round-up

Broker tips: Lonmin, FirstGroup, Sky

Lonmin upgraded by HSBC on poor share performance

BROKER RATINGS SUMMARY: Shore Capital Upgrades Sky To Buy From Hold

LONDON BRIEFING: James Murdoch Back As Chairman Of Sky

Lonmin Platinum Production Rises As Workforce Reduction Progresses

UPDATE 1-Platinum producer Lonmin cuts jobs and costs

Platinum producer Lonmin cuts jobs and costs

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