Lonmin, seeking cash to stay afloat, said yesterday it had received acceptances for 19.2 billion new shares as of December 10 out of 27 billion shares it was selling to shareholders.
The shares were priced at just 1 pence each on November 9, a 94 per cent discount to the stock’s previous session closing price of 16.25 pence on the London Stock Exchange.
“The lacklustre support for Lonmin indicates a possible market apathy for PGM (platinum group metal) stocks in what remains a challenging market,” BMO Capital Markets analysts said.
The rights issue was underwritten by HSBC, J.P. Morgan Cazenove and Standard Bank. Lonmin said they now need to find subscribers for the balance of nearly 8 billion new shares by Monday or take up the remaining shares themselves.
Bruised by strikes, rising costs, a weak platinum price and slowing demand for the metal, South Africa-focused Lonmin also said it planned to raise another $370m in loans to refinance debt currently due in May 2016.