Lonmin Plc on Monday signed a $200 million metal purchase agreement, which will provide the platinum miner better liquidity as it awaits the closure of Sibanye-Stillwater’s takeover of the company.
However, the new facilities 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.
Strapped for cash, Lonmin had unveiled plans to cut 12,600 jobs and have a further 890 merger-related layoffs when Sibanye agreed to buy out the company in December.
The all-share deal got a green-light last month from South Africa’s competition watchdog with some conditions that included Sibanye entering three short-term projects to avoid over 3,000 job losses.
Lonmin said it remains committed to the proposed deal with the South African competition tribunal’s hearing set for Nov. 12 to Nov. 14.
The funding agreement Lonmin has entered with an associate of Jiangxi Copper Company Limited is secured over Lonmin’s assets and removes some restrictions present in the company’s current debt facilities related to completion of the Sibanye deal.
The new transaction is expected to close within the week, Lonmin said.
Lonmin will also 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.