AUSTRALIAN miner Ivanhoe has announced a capital raising, with the company going into a pre-market trading halt.
Minter Ellison is advising Ivanhoe Australia on the deal, while Freehills is acting for UBS AG, Australian Branch and Morgan Stanley Australia Securities Limited.
The miner is raising a minimum of about $213 million to fund its Osbourne acquisition, develop the Merlin Project, to partially repay debt and to fund ongoing exploration and development.
The miner told the ASX that the trading halt was in relation to an accelerated non-renounceable entitlement offer of ordinary shares and options.
“The trading halt is necessary as otherwise trading in IVA ordinary shares may take place in an uninformed market and to allow the institutional component of the entitlement offer to take place in an orderly fashion,” the company said in a statement to the ASX.
The capital raising has been structured as a 1-for-4 accelerated non-renounceable entitlement offer to raise up to approximately $231 million at $2.88 per new share.
Subject to sufficient demand, Ivanhoe may go ahead with an institutional placement of up to a further $38 million at $2.88 per new share.
Under the terms of the offer, one free option will also attach to every two shares issued. Each free option is exercisable at a strike price of $3.38 at any time before 20 September 2011.
Freehills partner Philippa Stone said: “The free option provides investors with the benefit of any upside and also gives the company a potential source of future funding.”
Freehills’ Stone is supported by lawyers Ivan Yu and Carl Hornigold.
Freehills also acted for the underwriter in Ivanhoe Australia’s initial public offering in 2008.