Lonmin investors approve key $407m rights issue
Lonmin (LON:LMI) shareholders decided Thursday to approve a deeply-discounted $407 million share issue, as the struggling platinum miner seeks cash to stay afloat.
Hurting from strikes, rising costs and weak platinum prices, the South African company said last month it also planned to raise another $370 million in loans to refinance debt currently due in May 2016.
Without the move approved today, Lonmin, which is the world’s third largest platinum producer, would have run out of cash.
The new shares have been priced at 1 pence, a 94% discount to Lonmin's share price on the London Stock Exchange prior to the pricing announcement.
The stock has fallen almost 75% since the pricing of the rights issue was unveiled ten days ago, an it was down more than 6% Thursday mid-afternoon in London.
Platinum prices are on track for a 30% decline this year, its third consecutive annual fall, hobbled by slowing demand in top consumer China.