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LONMIN PLC - Lonmin gains bank support for Pandora and secures a pre-emptive covenant wa

Release Date: 06/10/2017 08:00
Code(s): LON     PDF:  
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Lonmin gains bank support for Pandora and secures a pre-emptive covenant wa

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 : GB00BYSRJ698
("Lonmin")

REGULATORY RELEASE


Not for release, publication or distribution (directly or indirectly) in whole or in part, in, into or
from any jurisdiction where to do so would constitute a violation of the relevant laws of such
jurisdiction.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

6 October 2017

Lonmin (“Lonmin” or the “Company”, the “Group”) gains bank support for Pandora and secures a
pre-emptive covenant waiver

Lonmin Plc (“Lonmin” or “the Company”) is pleased to announce the consent of its lending banks for
its acquisition of the Pandora JV and a pre-emptive waiver of its Consolidated Tangible Net Worth
(“TNW”) covenants for the period from 30 September 2017 to 30 March 2018 (the “Waiver Period”).

Acquisition of the Pandora JV

As announced on 7 August 2017, Lonmin received approval from the Department of Mineral
Resources for both its S11 applications to acquire the interests of Anglo American Platinum and
Northam Platinum in the Pandora JV. This followed the Competition Tribunal approval received in
May 2017. The completion of the transaction is also subject to the consent of Lonmin’s lending
banks, which is announced today.

The completion of the Pandora transaction unlocks significant synergies. It allows Lonmin to extend
mining at its Saffy shaft without having to spend R2.6 billion of capital expenditure, of which R1.6
billion would have been required over the next four years.

Lonmin expects to complete the acquisition before the announcement of its full-year results in
November 2017, having met all the remaining administrative conditions precedent.

Operational Review and pre-emptive TNW Covenant waiver

As also announced on 7 August 2017, Lonmin’s management team is focused on pursuing options to
preserve value for shareholders and safeguard the long-term interests of employees and all key
stakeholders through the Operational Review. The Company is exploring several initiatives and is
currently progressing early stage discussions with a variety of parties.

As detailed on 15 May 2017 in Lonmin’s Interim Results, the Company’s loan facility agreements
require it to test two covenants related to its TNW every six months. The Group’s TNW is

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predominantly affected by macroeconomic factors outside Lonmin’s direct control, including the
period-end US dollar/South African rand exchange rate and PGM price outlook.

The Company is currently in the process of finalising the 30 September 2017 financial statements and
the calculation of its TNW as at its 30 September year-end; however, as a pre-emptive measure and
in order to focus on the Operational Review, Lonmin has requested and obtained a waiver of both
covenants for 30 September 2017.

The Company has also agreed with its lending banks, as a condition to the waiver, to cancel its
revolving B2 facilities of $21 million and to leave undrawn approximately $200 million of remaining
revolving credit facilities during the Waiver Period.

Lonmin will continue to regularly update its lending banks to ensure their consent for the
implementation of initiatives identified by the Operational Review. The remaining revolving credit
facilities will be available following the end of the Waiver Period subject to the banks being satisfied
with the resulting business plan and Lonmin’s ability to pass the TNW covenant tests at that time.

The Group’s liquidity is expected to be adequate for the Waiver Period, taking into account the
Company’s past working capital requirements, particularly during the first quarter of the financial
year, with the continued support of the lending banks and absent any material unforeseen adverse
events. The Company has generated cash in Q4 resulting in an increased net cash position of
approximately $100 million from $86 million at the end of Q3 2017(unaudited). The Gross cash at
fiscal year ending 30 September 2017 was approximately $250 million.

Lonmin expects sales to be slightly above guidance for the financial year 2017 and confirms unit cost
and capex guidance.

                                                - END -


ENQUIRIES

Investors / Analysts:
Tanya Chikanza (Head of Investor Relations)               +44 203 908 1073 / +27 11 218 8358
Andrew Mari (Investor Relations Manager)                  +27 11 218 8420

Media:
Wendy Tlou (Head of Corporate Communications)             +27 11 218 8300 / +27 83 358 0049
Anthony Cardew / David Roach, Cardew Group                +44 207 930 0777


Additional Information

The release, publication or distribution of this announcement in certain jurisdictions may be
restricted by law. Persons who are not resident in the United Kingdom or who are subject to the laws
of other jurisdictions should inform themselves of, and observe, any applicable requirements. Any
failure to comply with applicable requirements may constitute a violation of the securities law of any
such jurisdiction.

This announcement is not intended to, and does not, constitute or form part of any offer, invitation
or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose
of, any securities whether pursuant to this announcement or otherwise.


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Notes to editors

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 Igneous Complex in South Africa, where more than
70% of known global PGM resources are located.

The Company creates value through mining, refining and marketing PGMs and has a vertically
integrated operational structure - from mine to market. 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


JSE Sponsor: J.P. Morgan Equities South Africa (Pty) Ltd




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