Johannesburg - What was left of the market capitalisation of the beleaguered platinum miner Lonmin [JSE:LON] was almost wiped out on Friday morning, when the share price dropped more than 85% in response to shareholders' decision to approve a rights issue at a massive discount.
The stock closed 10% lower at R2.02 on Thursday after the result of the shareholders' meeting was announced. It opened at only 30c on Friday and stayed there for most of the morning - a drop of 85.15%. At midday the share price was 1c higher at 31c.
Shareholders were asked on Thursday to approve a rights issue of $407m to help the company refinance its debt in an effort to stay afloat. The new shares were controversially issued at only 1c per share, to force shareholders to take up many of them to keep their interest intact.