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Nickel producer launches equity raising
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Nickel producer launches equity raising

Roger Davies

A Western Australian nickel mining company has undertaken equity raising initiatives worth around $70 million.

Firms: Ashurst (Western Areas Ltd); Clayton Utz (Macquarie, Morgan Stanley)

Deal: Western Areas launched a fully underwritten placement and non-underwritten share purchase plan, with Macqurie Capital and Morgan Stanley as joint lead managers, underwriters and bookrunners.

Value: Placement: $60 million; Share purchase plan: $10 million

Area: Equity capital markets

Key players: The Ashurst team was headed up by corporate partner Roger Davies.

Deal significance: Western Areas, an Australia-based nickel sulphide explorer and producer, will have its placement conducted via a volume-only bookbuild, both in Australia and overseas jurisdictions, according to a statement by Ashurst.

Shares under the placement will be issued at $2 per share, a 7.4 per cent discount on the closing price on 30 March.

The share purchase plan will be open to eligible shareholders at 7pm on 30 March, with the opportunity to subscribe to new shares up to the value of $15,000.

The plan will be capped at $10 million and is not underwritten. The issue price for the plan will be the same as the issue price for the placement.

The proceeds from both initiatives be used by the company to “strengthen its balance sheet and provide greater financial flexibility to fund various growth”, the statement said.

“These initiatives include an accelerated and discounted payment of the remaining amounts due for the acquisition of the Cosmos Nickel Complex from Glencore Plc of A$12.6 million along with targeted exploration programs, project studies at Cosmos and the ability to re-start deferred discretionary capital projects at short notice when justified by nickel market conditions.”

 

 

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