Nickel Mines in A$231m equity deal
PERTH (miningweekly.com) – ASX-listed Nickel Mines has launched a A$231-million equity raise to fund the purchase of additional interest in the Hengjaya and Ranger Nickel rotary kiln electric furnace (RKEF) plants, in Indonesia.
Nickel Mines on Tuesday revealed that it had struck an agreement with project partner Shanghai Decent Investment Group to acquire an additional 20% interest in each of the RKEF plants, taking its stake in each plant to 80%, at a combined price of some $150-million.
The cash consideration payable will consist of a $120-million exercise price for the option, or $60-million for each 20% interest in the two RKEF plants, as well as a $30-million payment representing compensation for Shanghai Decent’s estimated share of undistributed retained earnings of the interest in the RKEF plans being acquired by Nickel Mines.
In moving to an 80% interest in the Hengjaya RKEF plant, Nickel Mines’ attributable share of nickel production would increase from around 13 000 t/y to some 17 500 t/y, while its increased shareholding in the Ranger Nickel RKEF plant would also see attributable production increase from around 13 000 t/y to 17 500 t/y.
To fund the acquisition, Nickel Mines is undertaking a fully underwritten 1-for-3.6 entitlement offer, priced at 50c each, to raise A$231-million.
The ASX-listed company on Tuesday noted that the offer price represented an 11.5% discount to its last closing price on May 18, and a 9.2% discount to the company’s theoretical ex-rights price.
The entitlement offer will see some 463-million new shares being issued, representing approximately 28% of Nickel Mine’s existing issued capital.
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