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Lonmin may shore up its finances

August 21 2012 at 05:56pm
By Reuters

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IOL BR mining PIC001

Reuters.

Lonmin, the world's third-largest platinum produer, said on Tuesday it may issue new shares to shore up a balance sheet hit by lost production and revenue after a violent strike last week left 44 dead.

“The company is reviewing all the options available to strengthen its financial structure, including possible access to the equity capital markets,” Lonmin said in a statement.

Analysts have speculated the company may try to raise new capital from shareholders as existing agreements with lenders require it to keep a lid on its debt-to-profit ratios.

The company said those ratios would likely be breached by September 30.

Investors have hammered Lonmin shares on concerns about lost earnings from the strike, sending its stock down nearly 13 percent last week.

The shares rose for the first time in 9 trading sessions on Tuesday, rising 3.6 percent in Johannesburg. - Reuters


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