Lonmin PLC LMI Lonmin Shareholders urged to vote for Rights Issue

  Lonmin PLC (LMI) - Lonmin Shareholders urged to vote for Rights Issue

RNS Number : 9653Q
Lonmin PLC
13 November 2012




REGULATORY RELEASE





13 November 2012



       Lonmin Urges Shareholders to Vote in Favour of the Rights Issue



The Board remains confident of the  longer-term potential of Lonmin, with  its 
high-quality asset base and  long-term mining licences,  and in the  long-term 
fundamentals of the PGM industry. The Board's primary focus continues to be on
preserving and enhancing  value for  all Lonmin shareholders  and its  various 
stakeholders, including  more than  28,000 Lonmin  employees, as  well as  the 
Company's Black Economic  Empowerment partners. The  Board remains clear  that 
the interests  of all  Lonmin  shareholders are  best-served by  securing  the 
financial future of the Company at the earliest opportunity.



Last week Xstrata wrote to the Board of Lonmin stating that it was prepared to
support the  Rights  Issue  but  on the  condition  that  the  Board  publicly 
committed to ceding management control to Xstrata. This proposal was  rejected 
by Lonmin, and  in this context  the Board wishes  to emphasise the  following 
points to shareholders  before they vote  on the Rights  Issue at the  General 
Meeting of the Company to be held on 19 November 2012 (the "General Meeting").



The importance of achieving financial certainty through the Rights Issue



Following the tragic Events at  Marikana, the management of Lonmin  negotiated 
Amended  Facilities  Agreements  with  the  Company's  lending  banks.  These, 
together with the fully underwritten  Rights Issue, represent a  comprehensive 
balance sheet restructuring which the Board is confident will place Lonmin  on 
a sound financial footing for the future.



Achieving financial certainty for Lonmin  through this process is  conditional 
on a  majority of  shareholders voting  in  favour of  the resolution  at  the 
General Meeting. The  Board firmly believes  that if the  Rights Issue is  not 
approved it  will  jeopardise  the  substantial  inherent  value  in  Lonmin's 
well-invested assets to the detriment of all stakeholders.



The urgency of completing the Rights Issue on the current timetable



The Amended Facilities Agreements are  conditional, inter alia, on  completion 
of the Rights Issue and receipt by  the Company of at least US$700 million  of 
net proceeds by 31 December 2012.



The Directors believe that without the Amended Facilities Agreements the Group
may breach its banking covenants when they are next tested. A breach of any of
the Group's covenants could result in events of default which would cause  the 
Group's borrowings to become repayable on  demand. As at 31 October 2012,  the 
Group's net debt was approximately US$550 million (unaudited), and this number
is forecast to rise further in the coming months as the successful ramp-up  to 
normalised production levels continues.



In order to complete the  Rights Issue by 31 December  2012, and so to  ensure 
that the Amended Facilities Agreements come into effect, it is imperative that
the General Meeting  take place on  19 November 2012  and that the  resolution 
authorising the Directors to allot new shares be passed.



Management actions since August 2012



The Board commends the current management  team for doing a remarkable job  in 
responding to  the  extraordinary set  of  circumstances which  have  affected 
Lonmin since August 2012. In this  time, the management team has  successfully 
managed a  return to  production following  the Events  at Marikana  with  the 
subsequent ramp  up  exceeding  initial  expectations, at  the  same  time  as 
executing a  comprehensive  debt and  equity  balance sheet  restructuring  to 
secure Lonmin's longer-term financial future.



The current  management arrangements  were put  in place  in response  to  Ian 
Farmer sadly having to step away from the business due to serious illness at a
time when the Company was facing a momentous period in its history. The  Board 
believes that the current arrangements are appropriate for the time being  and 
are working well to stabilise the Company and bring production back to normal.



Consistent with corporate governance best  practice the Board recognises  that 
permanent appointments need to be made and is committed to taking the required
process forward,  including consultation  with shareholders,  as soon  as  the 
Rights Issue is concluded and the Company is on a secure financial footing.



Conclusion



As described in the  Prospectus, if the  Rights Issue does  not proceed by  31 
December 2012 and the Amended Facilities  Agreements do not come into  effect, 
the Company may  be unable to  comply with its  financial covenants in  future 
tests which may ultimately jeopardise its very future. Furthermore, the  Board 
believes that failure to proceed with the Rights Issue would leave the Company
in a highly vulnerable position in its discussions with its banking group and,
potentially, in relation to Xstrata if it were to make a further proposal.



The Board wishes to confirm that, as in the past, it will consider any revised
proposal that Xstrata wishes to make on its merits. In assessing any  proposal 
the Board  will  seek  to  protect  the  interests  of  all  shareholders.  In 
particular the Board  will continue to  avoid any structure  or process  which 
undermines the financial stability of Lonmin and it will also fight to  ensure 
that the  economic terms  of any  transaction reflect  the true  value of  the 
Company and an appropriate control premium, if relevant.



The Board therefore urges all shareholders to vote in favour of the resolution
at the General Meeting. Those shareholders wishing to vote by proxy must lodge
their form of proxy with  the Company's registrar by  no later than 5:00  p.m. 
(London time) or 7:00 p.m. (Johannesburg time) on 16 November 2012.





ENQUIRIES



Investors / Analysts:

Lonmin

Tanya Chikanza (Head of Investor Relations) +27 11 218 8300 /

                                             +44 20 7201 6007
Ruli Diseko (Investor Relations Manager)      +27 11 218 8373



Media:

Cardew Group

James Clark / Emma Crawshaw +44 20 7930 0777
Sue Vey                      +27 72 644 9777



Brunswick - Johannesburg

Cecilia de Almeida +27 11 502 7400 /

                     +27 83 325 9169



Notes



Capitalised terms which are not defined in this announcement have the  meaning 
given to them in  the Prospectus published by  the Company in connection  with 
the Rights Issue on 9 November 2012.



This announcement includes  forward-looking statements within  the meaning  of 
the securities laws of certain jurisdictions. These forward-looking statements
include,  but  are  not  limited  to,  statements  other  than  statements  of 
historical fact including  without limitation, those  regarding the  Company's 
intentions, beliefs or  current expectations concerning,  among other  things, 
the Company's results of  operations, financial condition, prospects,  growth, 
strategies and  the industry  in which  the Company  operates.Forward-looking 
statements are typically identified by the use of forward-looking  terminology 
such as "believes",  "expects", "may", "will",  "could", "should",  "intends", 
"estimates", "plans", "assumes"  or "anticipates" or  the negative thereof  or 
other variations  thereon  or comparable  terminology,  or by  discussions  of 
strategy   that   involve   risks   and   uncertainties.By   their    nature, 
forward-looking statements involve risks and uncertainties, including, without
limitation, the risks  and uncertainties to  be set forth  in the  Prospectus, 
because they relate to events and depend on circumstances that may or may  not 
occur in the future; actual events or results may differ materiallyfrom those
expressed in  or  implied  by  these  statementsas  a  result  of  risks  and 
uncertainties facing the Company and its subsidiaries.Many of these risks and
uncertainties relate  to factors  that  are beyond  the Company's  ability  to 
control or estimate precisely,  such as changes  in future market  conditions, 
currency fluctuations, the behaviour of other market participants, the actions
of governmental  regulators and  other risk  factors such  as changes  in  the 
political, social and regulatory framework in which the Company operates or in
economic or  technological  trends  or  conditions,  including  inflation  and 
consumer confidence, on a global,  regional or national basis.Such risks  and 
uncertainties could cause actual  results to vary  materially from the  future 
results indicated, expressed  or implied in  such forward-looking  statements. 
The forward-looking statements contained in this announcement speak only as of
the date of this announcement and the Company undertakes no duty to update any
of them publicly in light of new  information or future events, except to  the 
extent required by applicable law, the Prospectus Rules, the Listing Rules and
the Disclosure and Transparency Rules.



Notes to editors



Lonmin, which is listed on both the London Stock Exchange and the Johannesburg
Stock Exchange, is one of the world's largest primary producers of PGMs. These
metals are essential  for many industrial  applications, especially  catalytic 
converters  for  internal  combustion  engine  emissions,  as  well  as  their 
widespread use in jewellery.



Lonmin's operations  are situated  in the  Bushveld Complex  in South  Africa, 
where nearly 80% of known global PGM resources are found.



The Company  creates  value  for shareholders  through  mining,  refining  and 
marketing PGMs and has  a vertically integrated  operational structure -  from 
mine to market. Lonmin's mining operations extract ore from which the  Process 
Division produces refined  PGMs for  delivery to  customers. Underpinning  the 
operations is the Shared Services function which provides high quality  levels 
of support and infrastructure across the operations.



For further information please visit our website: http://www.lonmin.com

                     This information is provided by RNS
           The company news service from the London Stock Exchange

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MSCBJBFTMBJBMAT -0- Nov/13/2012 07:01 GMT