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Lonmin prices rights issue at 1 pence a share

Platinum nugget
Harry Taylor | Getty Images
Platinum nugget

Platinum producer Lonmin on Monday priced its $407 million rights issue at a 94 percent discount as the firm fights for survival in the face of depressed commodity prices.

Lonmin said it would sell 27 billion shares at 1.00 pence each to its shareholders, compared to the stock's last trading price of 16.25 pence on the London Stock Exchange on Friday.

The company had flagged that the equity cash call would be issued at a "significant discount", underscoring a 90 percent tumble in its stock price this year.

Battered by strikes, rising costs and weak platinum prices, Lonmin said last month it planned to raise the money and another $370 million in bank loans to refinance debt due in May 2016.

Lonmin has urged shareholders to approve the equity cash call at a meeting on November 19, saying the injection was crucial to its survival.

Greenhill advised Lonmin on the rights issue.

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