Lonmin shares plummet

August 20, 2015, 5:19am
Pic: SABC News

Lonmin shares plummet

LONMIN shares lost another 20% to record lows in early afternoon trade on Wednesday, bringing losses to a staggering 73% since July.

The world’s third-largest platinum producer has been under relentless pressure for weeks amid mounting speculation that it could go to the market to raise capital via a rights issue.

"I think cash flow is the concern. They are burning through cash in current conditions and have some debt facilities due soon," MyWealth Investments CE Devin Shutte said.

"If they cannot raise additional debt, they might not have any choice but to go to the equity market, and raise capital at deeply discounted levels."

At 2.04pm the stock was down 20.59% to R5.40 on the JSE, giving the company a market value of R3.142bn.

The platinum miners’ index lost 1.40% on the day, having declined 21% since the start of July.

By Andries Mahlangu BDLive