Published November 19, 2012
LONDON – Shareholders in South African platinum miner Lonmin have voted in favour of an $817 million rights issue to repair a strike-battered balance sheet and fund its recovery.
Lonmin said more than 91 percent of votes cast were in favour. Investors representing almost 78 percent of the company's shares voted.
The rights issue, essential for Lonmin to meet revised conditions set by its lenders, had been expected to be voted through after its single largest shareholder, miner Xstrata , said last week it would back the cash call.
Xstrata's position was uncertain until then, after a rejected reverse takeover proposal and moves to eject Lonmin's current management were made public earlier this month. Xstrata, which holds a 25 percent stake as a result of a failed 2008 takeover effort, said it was concerned current management could not "ensure a sustainable future".
Xstrata eventually agreed to back the rights issue but said it would continue to seek management change and a new strategy.
Lonmin, which already had one of the most stretched balance sheets in the sector, was hit in September by strikes at its flagship Marikana mine which saw some of the worst violence in South Africa since the end of apartheid and left 46 people dead.
It needs to raise at least $700 million by the end of the year in order to meet conditions set by its lenders.
(Reporting by Clara Ferreira-Marques; Editing by Andrew Callus)