There’s talk in the market of Lonmin, the embattled platinum miner, conducting a fourth rights issue, but the dismal uptake of the third rights issue puts that speculation into context and shows it’s just not a viable option. Lonmin needs cash fast. It’s clear that Lonmin is talking about everything but a rights issue after the $400m rights issue at the end of 2015, a year in which its share price plunged 98% to its lowest yet. That rights issue was discounted 94% to just a single penny on the JSE, yet was only taken up by 71% of shareholders as almost 27-billion shares were issued and then quickly consolidated. Banks will not underwrite another rights issue if they have to pay for such a large chunk of the funding themselves — not to mention large shareholders such as the Public Investment Corporation (PIC), a 30% shareholder — following its rights yet again or underwriting the issue again, further exposing itself to a poor investment. The sale of the Akanani and Limpopo assets is ...
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