Lonmin had staved off a potentially crippling breach of a vital covenant with lenders by sustained improvement in its operational performance in the third quarter of its financial year, leaving it in a more secure position, despite continuing head winds from low metal prices, CEO Ben Magara said. The improved operational performance at Lonmin’s major mines, the completion of the purchase of the remaining stake in the Pandora joint venture, as well as higher cash levels in the company had made discussions with the group’s lenders about the tangible net worth covenant more constructive, Magara said on Monday. The covenant came close to being breached about three months ago. "The most critical thing for that covenant is the underlying performance," he said. "If it is not coming to the table then it’s very difficult to have any proactive engagements with lenders. The sustained mining turnaround is helpful for such conversations and we are doing all we can in our control to constructivel...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.