South Africa’s Public Investment Corporation (PIC) has increased its stake in platinum producer Lonmin to almost 30 percent after buying more shares via the company’s rights issue.
The PIC, which manages South African government employee retirement funds, now own 29.99 percent of miner, up from 7 percent, Lonmin said on Monday.
Bruised by strikes, rising costs, a weak platinum price and slowing demand, South Africa-focused Lonmin also said it planned to raise another $370 million in loans to refinance debt currently due in May 2016.
Lonmin said on Friday that its deeply discounted $400 million rights issue was undersubscribed, after its shareholders only bought 19.2 billion shares, or 71 percent, of its proposed 27 billion share issue.
The outcome allowed PIC to increase its stake in the company after it had sub-underwritten a material portion of the issue, over and above its entitlement.
The undersubscribed rights issue also forced underwriters, HSBC, J.P. Morgan Cazenove and Standard Bank, to take up shares in the company.
Lonmin’s shareholders approved the share issue last month after the company warned that if it could not raise the cash trading in its shares could be suspended.