Lonmin gets covenant waiver from lenders to complete Sibanye merger

By Sarah Lizee

Olympia, Wash., Jan. 18 – Lonmin plc received a further covenant waiver on its debt agreements from its lenders in order to prevent an event of default, according to a Thursday company announcement.

The company entered into an all-share offer in which Sibanye Gold Ltd., and/or a wholly owned subsidiary of Sibanye-Stillwater, will acquire Lonmin.

Lonmin obtained in-principle agreement from its lenders for a further waiver of compliance with its consolidated tangible net worth debt covenants until the earlier of the offer closing, lapsing or being withdrawn and the current transaction long-stop date of Feb. 28, 2019.

As part of the company’s finalization of its full year accounts, the determination of the non-cash impairment to the carrying value of the group’s assets for the year ended Sept. 30 is substantially complete, the effect of which is anticipated to reduce the group’s consolidated tangible net worth significantly below the $1.1 billion minimum required under the debt covenants, according to the announcement.

The waiver will ensure that the shortfall in Lonmin’s net worth is not regarded as an event of default during the waiver period.

The company said it will release its financial results for the year ended Sept. 30 and first-quarter production report on Jan. 22.

Lonmin is a London-based producer of platinum group metals operating in the Bushveld Complex of South Africa.

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