South Africa's Lonmin (LON:LMI), the struggling platinum producer in the process of being taken over by rival Sibanye-Stillwater (JSE:SGL) (NYSE:SBGL), said Monday it had raised $200 million through a metal-for-loan deal with a state-backed Chinese company.
Under the deal, Lonmin will repay most of the loan by delivering platinum and palladium over a three year period to a subsidiary of Jiangxi Copper, China's largest copper producer.
The new facilities, however still do not address "fundamental business challenges facing Lonmin and do not offer an opportunity to avoid the announced retrenchments and shaft closures," chief executive officer Ben Magara said in the statement, referring to plans to axe 12,600 jobs over the next three years.
Even after the takeover by Sibanye, which will create the world's No.2 platinum producer, Lonmin has said it expects to let go 3,700 people before the end of the year.
News of the refinancing, to close within the week, came as the company also announced it had produced 1.32 million ounces of platinum, palladium and other metals in the year to September and its net cash position had improved by $13 million to $114 million.
Lonmin also said Monday it would settle its pre-existing term loan of $150 million and cancel its other pre-existing undrawn facilities with both its South African rand and US dollar lender groups.