Lonmin has rejected a reverse take-over proposal from its largest shareholder, Xstrata, which questioned the ability of the strike-hit platinum producer's current bosses to keep their loss-making group afloat. At the centre of a wave of strikes at South African mines that have left dozens dead, Lonmin highlights the difficulties facing a platinum industry under pressure from low prices, rising costs and a restive labour force.
Lonmin on Friday detailed a discounted $817 million rights issue to repair its balance sheet - its second cash call in three years - and said it had slid to a $698 million full-year loss. Xstrata, which holds a 25 percent stake as a result of a failed 2008 takeover attempt, said the aim was not to take control, only to protect the value of its investment. It took a $514 million writedown on its Lonmin stake in August.