Lonmin gets $200 mln purchase pact, committed to Sibanye deal
Oct 22 (Reuters) - Lonmin Plc on Monday signed a$200 million metal purchase agreement, which will provide theplatinum miner better liquidity as it awaits the closure ofSibanye-Stillwater's takeover of the company.
However, the new facilities still do not address"fundamental business challenges facing Lonmin and do not offeran opportunity to avoid the announced retrenchments and shaftclosures," Chief Executive Officer Ben Magara said.
Strapped for cash, Lonmin had unveiled plans to cut 12,600jobs and have a further 890 merger-related layoffs when Sibanyeagreed to buy out the company in December.
The all-share deal got a green-light last month from SouthAfrica's competition watchdog with some conditions that includedSibanye entering three short-term projects to avoid over 3,000job losses. Lonmin said it remains committed to the proposed deal withthe South African competition tribunal's hearing set for Nov. 12to Nov. 14.
The funding agreement Lonmin has entered with an associateof Jiangxi Copper Company Limited is secured overLonmin's assets and removes some restrictions present in thecompany's current debt facilities related to completion of theSibanye deal.
The new transaction is expected to close within the week,Lonmin said. Lonmin will also settle its pre-existing term loan of $150million and cancel its other pre-existing undrawn facilitieswith both its South African Rand and US Dollar lender groups.
(Reporting by Shariq Khan in Bengaluru; Editing by Bernard Orr)
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