Liontown shares drop after $316m equity placement
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More news: Shares in Liontown Resources fell after the lithium miner announced it had raised $316 million through an oversubscribed institutional placement.
After emerging from a trading halt around 12:40pm AEST, Liontown’s shares had dipped 5.7% to 80 cents each by 1:39pm.
The placement offered new shares at a discounted 73 cents each, attracting a $50 million investment from the National Reconstruction Fund Corporation and a conditional placement from industrial conglomerate Canmax Technologies, among others.
Liontown seals $316m raise as lithium giant Canmax joins placement
The news: Lithium miner Liontown Resources has raised $316 million in a two-tranche institutional placement, first announced on Thursday.
The numbers: The miner said it completed its bookbuild for a $266 million institutional placement to new and existing investors at 73 cents per share. Liontown shares last traded at 84.5 cents.
In addition to the placement, Liontown has accepted oversubscriptions totalling $50 million, by way of a conditional placement of new shares to industrial conglomerate Canmax Technologies and other institutional investors at the placement price. Canmax is one of the world's leading producers of lithium chemicals and a large consumer of lithium raw materials.
Liontown is also undertaking a share purchase plan for a further $20 million.
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.
Subject to completion of the conditional placement, which will require shareholder approval, Liontown will have a pro forma cash balance of $472 million.
What they said: "I'm very pleased with the strong support we've received for this placement, which attracted significant demand from high-quality institutional investors, both in Australia and offshore," said Liontown's managing director and chief executive Tony Ottaviano.
"Despite challenging market conditions, the backing from equity markets, who have contributed 84% of the money raised, alongside support from the National Reconstruction Fund Corporation, underscores the quality, long-term value, and strategic importance of Kathleen Valley to the Australian economy and national interest."
The source: ASX
