Lonmin’s delayed results show heady plunge deeper into the red
The company's ability to meet its debt covenants turns on the Sibanye deal succeeding in some form
The extent of the financial distress within Lonmin, a major platinum group metal producer, was highlighted in delayed results released on Monday. The results showed a heady plunge into a deep loss and a breach of temporarily suspended debt covenant conditions. The results were the clearest demonstration yet of why Lonmin is a takeover target by gold and platinum miner Sibanye-Stillwater. Lonmin’s lenders have agreed to waiver their covenant conditions until February 2019, the latest date by which the assets should have a new owner. The price of the waiver was an immediate freeze on further debt provision and loan facilities to Lonmin. Lonmin reported an annual post-tax loss for the year to end-September of $1.15bn, compared with a $400m loss the year before. The company recorded a $1.05bn impairment of nonfinancial assets during the year, almost equivalent to the tangible net worth value of $1.1bn it was not allowed to go below in terms of its covenants. After the 2017 impairment, t...
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