JOHANNESBURG - Platinum producer Lonmin Plc said on Monday it had agreed to enter into a U.S.$200 million metal purchase agreement with Pangaea Investments Management Limited (PIM) which would be paid over three years.
But Lonmin said the deal, expected to close within the week and to enhance its liquidity, would however not address the fundamental business challenges facing the company and would not avert planned job cuts.
The deal aims to provide Lonmin with improved liquidity and removes restrictive current lender conditions, notably the tangible net worth covenants contained in existing debt facilities which were waived by the existing lenders subject to the anticipated successful completion of Sibanye-Stillwater's R5 billion all share offer for Lonmin.
In May, the mining company announced that it would cut more than 3,000 jobs in the current financial year as part of its plans to release 12,600 workers in the next three years.
"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," Lonmin CEO Ben Magara said on Monday.