Sphere eyes A$240m capital raise
PERTH (miningweekly.com) – ASX-listed Sphere Minerals on Friday flagged a A$240-million capital raise to repay existing debt facilities with parent company Glencore and to fund ongoing operations until the end of 2016.
Sphere would offer existing shareholders 4.4 new ordinary shares for every one existing share held, with the equity raising priced at 25c a share.
The offer price represented a discount of 33% to the value of the company’s shares at the end of June this year, based on the book value of its assets.
The offer price also compared with a last material trading price of A$3.10 a share, which was reported in March 2013, before a significant fall in commodity prices and ongoing uncertainty around the global growth outlook, which adversely affected the value of resource companies.
Sphere told shareholders on Friday that while the entitlement offer was not underwritten, the company’s largest shareholder Sidero had indicated that it intended to take up its full entitlement under the entitlement offer, raising some A$211.7-million, which Sphere said would be sufficient to repay the Glencore debt.
Assuming no other shareholders took up their entitlement under the offer and Sidero took up its full entitlement, the shareholders stake in Sphere would increase to 97.6%, giving the shareholder the right to acquire the remaining issued share capital in Sphere.
There was, as yet, no indication if this was Sidero’s intention.
Sphere recently signed an exclusive option to Al Rawda Resources to buy an 80% interest in its Askaf project, in Mauritania, which would see Al Rawda pay $10-million in cash, along with a life-of-mine royalty of 2.5% on the revenue generated at the project.
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