Lonmin warns on cash woes, urges shareholders to back Sibanye takeover
(Recasts, adds detail, context, shares)
March 25 (Reuters) - Platinum miner Lonmin does not
have sufficient liquidity to fund the new projects needed to
avoid shaft closures and job losses, it said on Monday as it
urged shareholders to back its proposed takeover by
The London-listed company, crippled by soaring costs and
subdued platinum prices, has been cutting spending to conserve
cash and retain a positive balance sheet required by conditions
of South Africa-based Sibanye's offer.
However, progress on all fronts has been slow against the
backdrop of strikes by South Africa's Association of Mineworkers
and Construction Union (AMCU) in a long-running pay dispute.
AMCU, which has been on strike at Sibanye-Stillwater's gold
operations since mid-November, wanted to extend the strike to at
least 11 other companies including Anglo American's
gold and platinum operations, Harmony Gold and Lonmin.
However, South Africa's labour court rejected AMCU's request
"The challenges facing Lonmin and the industry persist,"
Lonmin said in a statement ahead of what is likely to be a fiery
AGM in London on Monday.
"This is why your board, recommends the all-share offer from
Despite "new and prudent measures" to refinance the business
with a previously announced $200 million facility, Lonmin said
it remains "financially constrained and unable to fund the
significant investment required to sustain our business and
associated employment in the future".
Lonmin added that poor production and correspondingly high
unit costs have continued in its second quarter this year,
largely offsetting the benefits of improved prices of platinum
Lonmin shares were up 8.4 percent at 76.9 pence at 1242 GMT.
(Reporting by Justin George Varghese in Bengaluru and Zandi
Shabalala in London
Editing by David Goodman)
First Published: 2019-03-25 13:43:33
Updated 2019-03-25 14:45:17
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