[Lonmin Plc] The Rise and Fall of a Mining Company That Tried to Buy Harrods – by Rodney Jefferson and Kevin Crowley(Bloomberg News – November 5, 2015)

http://www.bloomberg.com/

From Cecil Rhodes’s legacy in southern Africa to takeover battles gripping the British public and a massacre at one of its mines, the 106-year-old epic that’s Lonmin Plc risks entering its final act.

The company, whose businesses spanned gold mining, hotels, textiles and newspapers in the 1980s, later focused its efforts on platinum and is the world’s third-largest producer of the metal. Management warned on Wednesday that it might have to shut down should shareholders reject a $400 million stock sale as it succumbs to the slump in commodity prices.

Should investors decide not to cough up the money, one of Britain’s most prominent companies of the 20th century and a symbol of the country’s blend of imperialism and capitalism would be consigned to history less than two decades after the death of the man who built it.

“It’s gone from darling of the stock market to completely distraught,” said Bernard Swanepoel, who has been in the mining industry for 30 years and was chief executive officer of Harmony Gold Mining Co. He owns Lonmin shares. “It’s a cyclical business, but no one could have predicted the perfect storm of circumstances.”

Unraveling

A failed attempt to mechanize in the mid-2000s, the killing of protesting mineworkers by police at Marikana in 2012, a five-month labor strike last year and a 58 percent drop in the platinum price since 2008 has left Lonmin on the brink of collapse.

In addition to selling new stock, Lonmin aims to refinance $370 million in debt to stem losses from falling metals prices. Investors are due to meet on Nov. 19.

For the rest of this article, click here: http://www.bloomberg.com/news/articles/2015-11-05/the-rise-and-fall-of-a-mining-company-that-tried-to-buy-harrods

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