(Updates with detail)
LONDON, Oct 6 (Reuters) - Lonmin's lenders have
waived some of its debt covenants, allowing the platinum miner
to buy the rest of its Pandora joint venture mine, the South
African-focused producer said on Friday.
London-listed shares in Lonmin jumped 11 percent to a near
four-week high of 82 pence.
The miner, which is also listed in Johannesburg, is
battling low platinum prices and operational issues which have
forced it to sell assets and restructure its business.
And in May, the company's auditors flagged that Lonmin was
at risk of breaching debt covenants after a $146 million
writedown reduced its liquidity.
Lonmin said in statement that the waiver of the net worth
covenant runs from Sept. 30 to March 2018 and will allow the
miner to extend its Saffy shaft without spending 2.6 billion
rand ($190 million).
Lonmin will be able to mine a portion of the loss-making
Pandora from the adjacent Saffy shaft.
Lonmin said its banks waived two covenants related to its
net worth that were due to be tested at the end of September.
The debt covenant requires the miner's tangible net worth
not to dip below $1.1 billion. Lonmin's net worth at the end of
March was $1.4 billion, it said in May.
As part of the agreement, Lonmin will cancel one of its
credit facilities and leave $200 million from its remaining
facilities undrawn for the duration of the waiver.
"The Group's liquidity is expected to be adequate for the
Waiver Period...," Lonmin said.
The company said it expects full-year sales to be slightly
above its prior forecast while sticking to its cost and spending
Net cash rose 19 percent to $100 million in the fourth
quarter compared to the previous quarter, Lonmin said.
($1 = 13.6888 rand)
(Reporting by Radhika Rukmangadhan in Bengaluru and Zandi
Shabalala in London; editing by Alexander Smith)
First Published: 2017-10-06 08:27:12
Updated 2017-10-06 10:35:26
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