Liontown shares plunge after discounted capital raising
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More news: Shares in Liontown Resources have slid by an eye-watering 33% to $1.87 each on Friday morning after resuming trading after a week. The drop follows a discounted capital raising at $1.88 a share after US chemicals giant Albemarle abandoned a takeover bid. The raising secures funding for the lithium miner until its flagship Katherine Valley project starts production in mid-2024.
Liontown seals $1.18b funding for WA lithium project
The news: Liontown Resources has tied up a funding package for its flagship West Australian project just days after US chemicals giant Albemarle abandoned its takeover bid for the lithium explorer.
The numbers: Liontown raised $365 million through an institutional placement at $1.80 a share, a 35.5% discount to its last closing price of $2.79 ahead of a trading halt this week. It also made a placement for 6 million shares at the same price to chair Tim Goyder, raising $10.8 million, and will raise a further $45 million through a share purchase plan for existing shareholders. The company also finalised $760 million in debt funding from commercial banks and government credit agencies, including Export Finance Australia.
The context: The massive fundraising means its Kathleen Valley project in WA, one of the world’s biggest lithium projects, is now fully funded, at least until first production scheduled in mid-2024. Liontown CEO Tony Ottaviano said the fundraising efforts were critical in de-risking the development of the project. Liontown was forced to scramble into the fundraising after Albemarle abandoned its takeover bid, following the acquisition of a blocking stake by Gina Rinehart’s Hancock Prospecting, which became the company’s largest shareholder with 19.9% equity.
The source: ASX announcement
