LONMIN SIBANYE-STILLWATER TRANSACTION UPDATE
The Competition Appeal Court of South Africa (CACSA) has set down 2 April 2019 as the date for the hearing of the appeal filed by the Association of Mineworkers and Construction Union (AMCU) against the South African Competition Tribunal’s decision to approve the merger transaction.
The transaction was originally intended to have been completed by 28 February 2019. However, the appeal process embarked on by AMCU and others through the South African competition approval process, has substantially delayed its implementation.
In light of the appeal, the final date to complete the merger transaction has been extended from 28 February 2019 to 30 June 2019.
We remain fully committed to the transaction and continue to work to complete the transaction as soon as possible.
Whilst our financial position has improved since the announcement of the transaction in December 2017, it continues to be fragile and significantly exposed to changes in commodity prices, currency rates and operating conditions.
The challenging “lower for much longer” platinum pricing environment has created long-term damage to an ailing industry which has sacrificed at least 26,000 jobs in the last five years and continues to under-invest in its future.
We at Lonmin have been similarly impacted. We have reduced 8,000 positions in the Company in order to right size the business for its survival and for the sake of many who would remain in the business. In 2017, we announced the likelihood of 12,600 job losses over the three financial years 2018, 2019, 2020.
These were expected to occur regardless of the transaction with Sibanye, as the Company continues to restructure and close its high cost Generation 1 shafts to create a more sustainable business at a time when it does not have the capital to invest into new shafts.
In order to sustain the business and associated employment in the future, Lonmin needs significant capital investment, which it is unable to do alone given the financial constraints of the business. That is why it is so important that this Transaction with Sibanye completes as soon as possible.
In the event the Transaction does not complete, Lonmin could be in a position where it has restricted access to capital investment, cannot grow through developing new shafts, and there would accordingly be an increased risk of more jobs being lost.
Extracts of Lonmin press release, 2 April 2019
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