London, England — 20 November 2012 – Shareholders of platinum producer Lonmin have voted in favour of a plan to raise up to US $800 million through the issue of new shares “’ a development that allows the UK group to cut debt and rebuild platinum production which has been ravaged by lower platinum prices, higher costs, and strike action this year.
Miningmx reports that shares in Lonmin gained just over 5% in Johannesburg and were last trading at R70/share, their highest level since 5 November, days before it emerged that Xstrata had attempted a reverse takeover of the company.
At Lonmin’s annual general meeting yesterday, some 77.7% of the company’s total equity, equal to about 157.7 million shares, were cast, of which 91.1% voted in favour of the rights issue. About 8.9% of shareholders voted against the resolution.
Betraying no hint of the conflict between 24.5% shareholder, Xstrata, which attempted to oust Lonmin’s board after the reverse takeover proposal was rejected, the platinum firm’s chairman, Roger Phillimore, said his board looked forward to “… continuing its dialogue with them. We can now move forward, with confidence, in continuing our delivery of the Lonmin renewal plan,” he added in a statement.
All eyes turn now to discussions between Xstrata and Lonmin.
Xstrata CEO, Mick Davis, said last week that the diversified mining firm would support the rights issue, but also hoped for an overhaul of Lonmin management ahead of formulating a new business plan.
“We have asked Lonmin’s board to engage and co-operate with major shareholders to commence this process, refresh the board, strengthen the management team, and overhaul the current business plan so that a realistic strategy to restore shareholder value can be developed,” Davis said.
He added: “This would also obviate the need for us to call a further general meeting of shareholders to make the changes we believe necessary.”
Lonmin responded hours later saying: “The board continues to abide by the highest standards of corporate governance and will reflect on the comments made by all shareholders during the rights issue process.”
Source: Miningmx. For more information, click here.