Rare earths miner Lynas Corporation has turned to an equity raising after the recent collapse of its $500 investment deal with China Nonferrous Metal Mining (CNMC).
Lynas yesterday announced to the Australian Securities Exchange that it plans to raise $450 million from institutional investors to fund the development of its Mt. Weld rare earths project near Laverton in Western Australia.
According to Lynas, the decision to embark on the raising was a direct result of the 24 September termination by CNMC of its agreement with the company in relation to a proposed equity and debt investment.
CNMC walked away from the transaction when the Foreign Investment Review Board (FIRB) called for a number of changes to the agreed upon deal, including reducing its stake in Lynas to less than 50%.
Lynas was unavailable for comment when contacted this morning by MINING DAILY.
The rights issue will see Lynas shares offered at $0.45 each, which represents a 50% discount on the company’s last traded price.
Under the deal, Lynas will place $88 million worth of shares to existing and new institutional investors, with a second $67 million placement subject to shareholder approval.
Shareholders will also be able to take part in a one-for-one non-renounceable pro-rata rights issue to raise $295 million, including a $165 million retail component.