JOHANNESBURG – Lonmin has managed to stave off a major financial hurdle, signing a $200 million metal purchase deal with a Chinese company to pave the way for the completion of the R5 billion takeover by Sibanye-Stillwater.
The group said the $200m refinancing facility with Pangaea Investments Management (PIM) – an associate company of Hong Kong listed Jiangxi Copper Company – would provide better liquidity.
Chief executive Ben Magara said the facility, to be finalised by the end of the week, would see the world's third-largest platinum producer settling its pre-existing term loan of $150m and cancelling all its other pre-existing undrawn facilities with its rand and US dollar lender groups.
Magara said the agreement was positive and would immediately enhance the group's liquidity profile, but warned that structural problems remained.
“Regrettably, the new facilities do not address the fundamental business challenges facing Lonmin and do not offer an opportunity to avoid the announced retrenchments and shaft closures,” Magara said.