Lonmin $407 million rights offer and debt refinancing

Overview:

• Lonmin, a platinum group metals producer which owns operations at the Bushveld Igneous Complex in South Africa, issued a $407 million rights offer, which it priced at a 94% discount.
• Shareholders were able to subscribe to receive 46 new shares for each Lonmin share they own, at the price of 1p per share.
• The company also received $360 million to refinance its debt from a consortium of banks which included Barclays, Standard Chartered Bank, Citibank, JP Morgan, HSBC, and BNP Paribas. 
• The refinancing extends the company's US dollar loan for an additional four years.
• Standard Bank of South Africa, Investec Bank, and FirstRand Bank acted as senior lenders.
• JP Morgan, HSBC and Standard Bank acted as joint bookrunners for the rights offer. 
• This transaction was an attempt to raise funds in the midst of a difficult commodity market. 
• The refinancing depended on the rights offer being successful. 

Rani Mehta  - Journalist