Overview
Lonmin plc, the platinum producer with operations in South Africa, is proposing a financial restructuring to weather the low PGM price environment. The plan involves a US$400 million rights issue, a US$400 million new equity issue and an amendment of its debt facilities to replace the existing US$543 million, which matures in H1 2016. The new debt facility will be for US$370 million with maturity in May 2020.
The company has set out a business plan to reduce fixed cost expenses, remove high-cost PGM production ounces and reduce capital expenditure.
For the year ended 30 September 2015, Lonmin sold 752 koz of platinum (above guidance) and brought costs in at R10,339/oz (below guidance). As at 30 September, net debt (unaudited) amounted to US$185 million, down from US$282 million as at 31 March 2015.
Lonmin shares were up almost 10% in early trading in London this morning on the news.
Lonmin proposes debt restructuring: LMI