Platinum producer Lonmin plans a $400 million rights issue of new shares and will proceed with a planned restructuring to cut 6,000 jobs in the face of depressed prices, it said on Wednesday.
Lonmin also said in a statement it had slashed its capital expenditure for the year through Sept. 30 to $136 million from an original target of $250 million.
The company had already said it might trim its workforce by up to 6,000, including voluntary severance and early retirement programmes. It said the restructuring is now expected to be completed by the end of September 2016.
The embattled platinum producer, whose Marikana mine was the scene of the police slaying of 34 wildcat strikers three years ago, also said it planned to amend its debt facilities “for a total of $370 million, maturing in May 2020.”
It said this would be conditional on the raising of $400 million in new equity funding through the rights issue.
“The amended debt facilities will replace the existing debt facilities commitments which as at 30 September 2015 were approximately $543 million and which are maturing in May and June 2016,” it said.
Lonmin’s plans will likely be fraught with difficulties.
The company had to rely on an $800 million rights issue to shore up its battered balance sheet in November 2012 and investor sentiment is sour towards platinum and South African mining.
Lonmin and its peers, reeling from sinking prices and still recovering from a five-month strike last year, have been dealt a further blow by the emissions-scandal at Volkswagen.
Platinum fell to seven-year lows this month below $900 an ounce after the United States accused the German firm of using software for diesel cars that deceived regulators measuring emissions.
Also jobs are a sensitive issue in Africa’s most advanced economy, where the unemployment rate is around 25 percent, the mining workforce is restive, and income disparities are glaring.