By Clara Ferreira-Marques
LONDON Aug 17 (Reuters) – “You can never have enough
enemies,” Tiny Rowland once boasted, but even the buccaneering
tycoon who built what is now Lonmin plc might blench before the
“perfect storm” it faces after South African police killed 34
strikers at its Marikana platinum mine.
Never a stranger to controversy – in its days as Lonrho, a
British conservative prime minister of the 1970s famously called
its then head the “unacceptable face of capitalism” – Lonmin can
add human misery and a public relations nightmare to the labour
struggles and falling demand afflicting all platinum producers.
The company already has one of the most pressured balance
sheets in the sector and if production remains stalled after the
bloodshed its hopes of limiting a shortfall in its 2012 output
target and meeting debt-to-earnings commitments may dim further.
“Do yesterday’s events change the picture for Lonmin? I do
think yes, they do. What we would like to see is obviously the
speedy resolution of this conflict and the striking rock drill
operators return to work as quickly as possible,” said Panmure
analyst Alison Turner as investors stayed bearish on the stock.
“I think the kind of violence that you saw yesterday makes
that increasingly difficult.”
Adding to Lonmin’s woes, it announced on Thursday that well
regarded chief executive Ian Farmer, a veteran of the group
since well before the board ousted the late and controversial
Rowland in 1994, was seriously ill in hospital.
“I just couldn’t think of any more bad things that could
happen to them,” said a second industry analyst who spoke on
condition of anonymity. “It’s the perfect storm.”
Lonmin shares dropped over eight percent to their
lowest in London since 2008 on Friday, before recovering to
close down 1.3 percent at 619.4 pence near the close.
Continued…
