Business Day
*Lonmin investors give $817m share issue the nod*** *Allan Seccombe, Business Day, Johannesburg, 20 November 2012 *SHAREHOLDERS have authorised Lonmin to issue $817m worth of shares, but they want the board to address concerns about the way the world's third-largest platinum miner is being managed or face changes being forced upon it.
Shareholders, led by Xstrata, are unhappy with Lonmin's second, heavily-discounted rights issue. The first, for about $457m, came in 2009 soon after a $575m refinancing package. Xstrata, which holds 24.6% of Lonmin, was reluctant to back the rights issue without management changes as well as a clear strategy and business plan to turn the company around.
On Monday, Lonmin, which had net debt of $550m at the end of last month, was given 91% approval to proceed with the fully underwritten rights issue. Shareholders representing 77% of its issued equity voted at the meeting in London.
The company has to raise at least $700m before the end of the year. If it is successful in its R19.70 offer of nine shares for every five in issue, it will pay down debt, change the terms of debt covenants and fund its mines, which were stopped by a violent strike at its Marikana mine in August in which 44 people were killed, most of them by police.
"We can now move forward, with confidence in continuing our delivery of the Lonmin renewal plan," chairman Roger Phillimore said yesterday. Xstrata head Mick Davis said he would talk to the board about its business plans, bolstering its management and developing a strategy to address "the destruction of value of our shareholding".
At Monday's meeting, shareholder activist Theo Botha asked questions about Lonmin's communications with investors about the deaths, and whether its empowerment shareholder --- Incwala and its majority shareholder, Shanduka Resources --- would contribute towards the recapitalisation. Mr Phillimore's answers were not recorded and the company could not provide details.
Mr Botha said it was only at his request that a minute's silence was held for those killed at Marikana.
"I don't think they've learnt from their mistakes," he said. "I'm hoping Xstrata steps in and replaces the board members."
***From: http://www.bdlive.co.za/business/mining/2012/11/20/lonmin-investors-give-817m-share-issue-the-nod*
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