Lonmin mulls $1billion rights issue backed by Xstrata: paper
LONDON (Reuters) - Platinum miner Lonmin (LMI.L) is considering a $1 billion rights issue starting as early as next month to recoup losses following the closure of its Marikana mine in South Africa where 34 workers were killed, the Sunday Times reported.
Lonmin shareholder Xstrata XTA.L had signaled it was willing to cover its part of the fundraising, the newspaper said, citing sources close to the situation.
Lonmin was likely to ask for leniency in loan repayments from its bank and reduce its spending to deal with spiraling debt before the end of its financial year next month, the paper added.
The London-listed company was forced to stop operations at its biggest mine this week after South African police opened fire on striking miners armed with machetes and sticks on Friday.
It was Africa's bloodiest security operation since the end of apartheid.
The company is also under pressure from falling platinum prices due to a collapse in demand from European carmakers.