Reuters reports that platinum producer Lonmin, which is being bought by Sibanye-Stillwater, said in a statement on Monday that it did not have sufficient liquidity to fund the new projects needed to avoid shaft closures and job losses.
The London-listed miner, crippled by soaring costs and subdued platinum prices, has been cutting spending to conserve cash and retain a positive cash balance, one of the conditions upon which the Sibanye’s takeover is contingent. The all-share deal was likely to lead to more than 10,000 layoffs, the companies warned earlier. Lonmin said on Monday it had reduced over 8,000 positions as part of its business improvement plan. “Despite these achievements we continue to be financially constrained and unable to fund the significant investment required to sustain our business and associated employment in the future,” Lonmin said in the statement ahead of its AGM. “The challenges facing Lonmin and the industry persist,” Lonmin added.
- Read the short report by Justin George Varghese in the above regard at Moneyweb
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