Amcu wants Lonmin deal stopped
Lonmin’s biggest labour union has asked antitrust authorities to stop Sibanye Gold Ltd’s purchase of the struggling platinum miner should the new company intend to press ahead with more than 10 000 job cuts.
Lonmin has proposed 12 459 job cuts at mines that will run out of commercial deposits in the next three years.
That’s an “inflated” target, the Association of Mineworkers and Construction Union (Amcu) told the Competition Tribunal, which is hearing public comments on the deal. Lonmin has already cut about 2 000 jobs to weather a rout in platinum prices.
The magnitude of the planned cuts “warrant that the transaction be prohibited”, Amcu said in submissions to the tribunal.
The union also said that the outlook for platinum-group metals has improved and a weaker rand means Lonmin could operate profitably.
If the merger doesn’t take place, Lonmin would require $450 million to $500 million (about R6.5 billion to R7.2 billion) to remain in operation, CFO Barrie van der Merwe said at the tribunal hearing on Monday.
The company isn’t in a position to return to the market to raise more capital, he said.
The Competition Commission has recommended the acquisition, clearing a key hurdle for the deal, on condition that Sibanye tries to save about 3 700 jobs if prices improve and the company can maintain production costs at some shafts.
The tribunal is expected to give its final ruling on the matter once public submissions are concluded.
Sibanye’s acquisition of Lonmin is the latest in a series of deals by CEO Neal Froneman, who has transformed the gold miner by expanding into platinum-group metals.
For Lonmin, the deal comes after the company struggled through years of losses and was forced to seek debt-covenant waivers from lenders.
Sibanye shareholders may vote on the deal in January if the tribunal grants final approval of the transaction this year. – Bloomberg
Moneyweb
Investigations into two related investment schemes in the Western Cape have raised concerns about the prospects of investors getting their money back. One is facing a liquidation application from an investor who wasn’t paid out his capital when he requested it; the other has stopped paying monthly interest to investors. Questions first surfaced about Mortgage Secured Finance (MSF) when an investor was offered 13.5% interest on her capital earlier this year, while others have been paid 14.5%.
An application to liquidate MSF has been lodged in the Western Cape High Court by an investor who claimed he has been owed R5.8 million, plus interest, since February. The application was being opposed by one MSF director,
The magnitude of the planned cuts ‘warrant that the transaction be prohibited’, Amcu said insubmissions to the tribunal.