Rare earths group Lynas Corporation Ltd
(ASX:LYC) is to undertake an equity raising to raise around $450 million.
The capital raising will be undertaken at a price of 45 cents a share and will consist of three tranches.
An $88 million unconditional placement of new shares to existing institutional shareholders and other institutional investors, a $295 million entitlement offer and a $67 million conditional placement.
The company says it decided to conduct the capital raising after China Nonferrous Metal Mining terminated a heads of agreement with it in relation to a proposed equity and debt investment.
Lynas says the proceeds from the raising will be used to fund the completion of phase one of the Lynas Rare Earths Project, enabling the company to lift the suspension of the project and complete construction and commissioning of both the construction plant in Western Australia and the advanced materials plant in Malaysia.
On February 10 Lynas suspended work on the Rare Earths Project pending finalisation of as revised financing structure. Looking back at the past five years Lynas Corp is yet to post a net profit.
