Liontown Resources drops as share purchase plan opens
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The news: Liontown Resources led losses on the ASX 200 having traded higher earlier in the session, after the lithium miner opened a share purchase plan (SPP) as part of its capital raise announced last week.
The numbers: Liontown shares were down 6.5% to 82.3 cents at 1:20pm AEST, with the stock up 57% since the turn of the year.
The company is targeting to raise up to $20 million under the SPP, which opened this morning and is expected to close on 2 September.
Eligible shareholders in Australia and New Zealand can acquire up to $30,000 worth of Liontown shares under the SPP, at an issue price of 73 cents per share. This is the same issue price as under its $266 million institutional placement, which closed on Friday, and represents a 13.6% discount to the last closing price of 84.5 cents before the raise was announced.
The context: Proceeds from the capital raise, which included $50 million from the federal government's National Reconstruction Fund, will be used to "fortify Liontown's balance sheet" and has been sized to "ensure resilience across a range of lithium price environments," the company said.
In addition to the institutional placement and SPP, Liontown closed a conditional placement of $50 million in new shares to industrial conglomerate Canmax Technologies and other institutional investors. The conditional placement is subject to shareholder approval at a meeting slated for mid to late September.
The source: ASX
