Lonmin Says 71% of Rights Stock Accepted as Part of Bailout Plan

  • Platinum miner gets acceptances for 19.2 billion new shares
  • HSBC, JPMorgan, Standard Bank to find buyers by Dec. 14

Lonmin Plc got acceptances for 70.93 percent of the discounted shares it offered in an underwritten sale that’s part of a plan by the world’s third-biggest producer of platinum to save itself from collapse.

Shareholders agreed to buy 19.2 billion new shares and HSBC Holdings Plc, JPMorgan Cazenove and Standard Bank Group Ltd.’s South African unit will procure subscribers for the remaining 7.8 billion by Dec. 14, Johannesburg-based Lonmin said in a statement Friday. The new securities will begin trading on the London Stock Exchange at 8 a.m. local time Friday.

“To the extent that subscribers cannot be procured on the basis outlined above, the relevant new shares will be subscribed for by HSBC, JPMorgan Cazenove and Standard Bank,” Lonmin said.

The producer is selling $407 million of shares at a 94 percent discount to the market price before the offer was announced as it seeks to bolster its balance sheet amid at platinum price that’s down 29 percent this year. The company has been plagued by rising costs and discontent among its labor force, which went on a record-long five-month strike in 2014.

The stock is down 95 percent this year and yesterday climbed 2 percent to 1.03 pence in London.

Lonmin raised about $457 million from shareholders in 2009 and a further $817 million in 2012, after police opened fire on striking miners near one of the producer’s shaft in Marikana. At least 44 people were killed.

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