HomeBase MetalsXstrata buys more Lonmin shares

Xstrata buys more Lonmin shares

Xstrata’s Lydenburg
ferrochrome smelter
in South Africa
Zug, Switzerland — MININGREVIEW.COM — 02 October 2008 – Swiss-based Xstrata plc – which announced yesterday that it had no current intention to make an offer for Lonmin, the world’s third-largest platinum producer – has acquired 22 232 940 Lonmin ordinary shares at an average price of approximately £19.79 (R296.85) per Lonmin share for a total cash consideration of approximately £440 million (R6.6 billion).

Announcing this latest development here, the company said this acquisition would be entirely funded through the Xstrata Group’s debt facilities. This latest acquisition by the group represented approximately 14.2% of Lonmin’s issued ordinary share capital.

“The new acquisition of Lonmin shares – together with those previously acquired by Xstrata – represents approximately 24.9% of Lonmin’s issued ordinary share capital (38,939,421 Lonmin shares),” the announcement added. “The Xstrata Group’s shareholding in Lonmin has been acquired for a total aggregate cash consideration of approximately £991 million (almost R15 billion).”

Xstrata chief executive Mick Davis commented: “Xstrata’s purchase of an additional stake in Lonmin today provides us with a significant shareholding in one of the world’s largest platinum producers. We continue to believe the medium and long-term fundamentals of platinum are robust, and that the structure of the platinum industry remains attractive,” he added.

“Xstrata has today entered into a new three-year $5 billion (R40 billion) multi-currency revolving loan facility with a group of its relationship banks. The new facility will be used to re-finance existing debt, and for general corporate purposes,” said Davis, “and Xstrata remains well positioned to execute its strategy of growth and value creation for shareholders from a broad range of growth options.”