LONMIN PLC - Lonmin Urges Shareholders to Vote in Favour of the Rights Issue

Lonmin Urges Shareholders to Vote in Favour of the Rights Issue

Lonmin Plc (Incorporated in England and Wales)
(Registered in the Republic of South Africa under registration number
1969/000015/10)
JSE code: LON
Issuer Code: LOLMI & ISIN : GB0031192486 ("Lonmin")




REGULATORY RELEASE


13 November 2012

Lonmin Urges Shareholders to Vote in Favour of the Rights Issue

The Board remains confident of the longer-term potential of Lonmin,
with its high-quality asset base and long-term mining licences, and
in the long-term fundamentals of the PGM industry. The Board’s
primary focus continues to be on preserving and enhancing value for
all Lonmin shareholders and its various stakeholders, including more
than 28,000 Lonmin employees, as well as the Company’s Black Economic
Empowerment partners. The Board remains clear that the interests of
all Lonmin shareholders are best-served by securing the financial
future of the Company at the earliest opportunity.

Last week Xstrata wrote to the Board of Lonmin stating that it was
prepared to support the Rights Issue but on the condition that the
Board publicly committed to ceding management control to Xstrata.
This proposal was rejected by Lonmin, and in this context the Board
wishes to emphasise the following points to shareholders before they
vote on the Rights Issue at the General Meeting of the Company to be
held on 19 November 2012 (the “General Meeting”).

The importance of achieving financial certainty through the Rights
Issue

Following the tragic Events at Marikana, the management of Lonmin
negotiated Amended Facilities Agreements with the Company’s lending
banks. These, together with the fully underwritten Rights Issue,
represent a comprehensive balance sheet restructuring which the Board
is confident will place Lonmin on a sound financial footing for the
future.
Achieving financial certainty for Lonmin through this process is
conditional on a majority of shareholders voting in favour of the
resolution at the General Meeting. The Board firmly believes that if
the Rights Issue is not approved it will jeopardise the substantial
inherent value in Lonmin’s well-invested assets to the detriment of
all stakeholders.

The urgency of completing the Rights Issue on the current timetable

The Amended Facilities Agreements are conditional, inter alia, on
completion of the Rights Issue and receipt by the Company of at least
US$700 million of net proceeds by 31 December 2012.

The Directors believe that without the Amended Facilities Agreements
the Group may breach its banking covenants when they are next tested.
A breach of any of the Group’s covenants could result in events of
default which would cause the Group’s borrowings to become repayable
on demand. As at 31 October 2012, the Group’s net debt was
approximately US$550 million (unaudited), and this number is forecast
to rise further in the coming months as the successful ramp-up to
normalised production levels continues.

In order to complete the Rights Issue by 31 December 2012, and so to
ensure that the Amended Facilities Agreements come into effect, it is
imperative that the General Meeting take place on 19 November 2012
and that the resolution authorising the Directors to allot new shares
be passed.

Management actions since August 2012

The Board commends the current management team for doing a remarkable
job in responding to the extraordinary set of circumstances which
have affected Lonmin since August 2012. In this time, the management
team has successfully managed a return to production following the
Events at Marikana with the subsequent ramp up exceeding initial
expectations, at the same time as executing a comprehensive debt and
equity balance sheet restructuring to secure Lonmin’s longer-term
financial future.

The current management arrangements were put in place in response to
Ian Farmer sadly having to step away from the business due to serious
illness at a time when the Company was facing a momentous period in
its history. The Board believes that the current arrangements are
appropriate for the time being and are working well to stabilise the
Company and bring production back to normal.

Consistent with corporate governance best practice the Board
recognises that permanent appointments need to be made and is
committed to taking the required process forward, including


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consultation with shareholders, as soon as the Rights Issue       is
concluded and the Company is on a secure financial footing.

Conclusion

As described in the Prospectus, if the Rights Issue does not proceed
by 31 December 2012 and the Amended Facilities Agreements do not come
into effect, the Company may be unable to comply with its financial
covenants in future tests which may ultimately jeopardise its very
future. Furthermore, the Board believes that failure to proceed with
the Rights Issue would leave the Company in a highly vulnerable
position in its discussions with its banking group and, potentially,
in relation to Xstrata if it were to make a further proposal.

The Board wishes to confirm that, as in the past, it will consider
any revised proposal that Xstrata wishes to make on its merits. In
assessing any proposal the Board will seek to protect the interests
of all shareholders. In particular the Board will continue to avoid
any structure or process which undermines the financial stability of
Lonmin and it will also fight to ensure that the economic terms of
any transaction reflect the true value of the Company and an
appropriate control premium, if relevant.

The Board therefore urges all shareholders to vote in favour of the
resolution at the General Meeting. Those shareholders wishing to vote
by proxy must lodge their form of proxy with the Company’s registrar
by no later than 5:00 p.m. (London time) or 7:00 p.m. (Johannesburg
time) on 16 November 2012.


ENQUIRIES

Investors / Analysts:
Lonmin
Tanya    Chikanza   (Head     of   +27 11 218 8300
Investor Relations)                              /
                                       +44 20 7201
                                              6007
Ruli      Diseko     (Investor     +27 11 218 8373
Relations Manager)

Media:
Cardew Group
James Clark / Emma Crawshaw            +44 20 7930
                                              0777
Sue Vey                            +27 72 644 9777

Brunswick - Johannesburg
Cecilia de Almeida                 +27 11 502 7400


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                                              /
                                +27 83 325 9169

Notes

Capitalised terms which are not defined in this announcement have the
meaning given to them in the Prospectus published by the Company in
connection with the Rights Issue on 9 November 2012.

This announcement includes forward-looking statements within the
meaning of the securities laws of certain jurisdictions. These
forward-looking statements include, but are not limited to,
statements other than statements of historical fact including without
limitation, those regarding the Company's intentions, beliefs or
current expectations concerning, among other things, the Company's
results of operations, financial condition, prospects, growth,
strategies and the industry in which the Company operates. Forward-
looking statements are typically identified by the use of forward-
looking terminology such as "believes", "expects", "may", "will",
"could", "should", "intends", "estimates", "plans", "assumes" or
"anticipates" or the negative thereof or other variations thereon or
comparable terminology, or by discussions of strategy that involve
risks and uncertainties. By their nature, forward-looking statements
involve risks and uncertainties, including, without limitation, the
risks and uncertainties to be set forth in the Prospectus, because
they relate to events and depend on circumstances that may or may not
occur in the future; actual events or results may differ
materially from those expressed in or implied by these statements as
a result of risks and uncertainties facing the Company and its
subsidiaries. Many of these risks and uncertainties relate to factors
that are beyond the Company's ability to control or estimate
precisely, such as changes in future market conditions, currency
fluctuations, the behaviour of other market participants, the actions
of governmental regulators and other risk factors such as changes in
the political, social and regulatory framework in which the Company
operates or in economic or technological trends or conditions,
including inflation and consumer confidence, on a global, regional or
national basis. Such risks and uncertainties could cause actual
results to vary materially from the future results indicated,
expressed or implied in such forward-looking statements. The forward-
looking statements contained in this announcement speak only as of
the date of this announcement and the Company undertakes no duty to
update any of them publicly in light of new information or future
events, except to the extent required by applicable law, the
Prospectus Rules, the Listing Rules and the Disclosure and
Transparency Rules.

Notes to editors



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Lonmin, which is listed on both the London Stock Exchange and the
Johannesburg Stock Exchange, is one of the world's largest primary
producers of PGMs. These metals are essential for many industrial
applications, especially catalytic converters for internal combustion
engine emissions, as well as their widespread use in jewellery.

Lonmin's operations are situated in the Bushveld Complex in South
Africa, where nearly 80% of known global PGM resources are found.

The Company creates value for shareholders through mining, refining
and marketing PGMs and has a vertically integrated operational
structure - from mine to market. Lonmin's mining operations extract
ore from which the Process Division produces refined PGMs for
delivery to customers. Underpinning the operations is the Shared
Services function which provides high quality levels of support and
infrastructure across the operations.

For    further     information    please    visit    our     website:
http://www.lonmin.com




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