Rinehart will not support Liontown capital raise
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More news: A Liontown spokesperson has confirmed that Rinehart’s family company Hancock Prospecting will not participate in the capital raising, and that its 18% shareholding would be diluted to around 17%, depending on how many shareholders participate in the capital raise.
The company’s second-largest shareholder Tim Goyder, who has a 14% stake, is only partly participating, he added.
The trading halt is due to be lifted on Monday 11 August, ahead of the institutional placement settlement on Tuesday the 12th. The retail entitlement offer opens on Thursday 14 August and closes on 2 September, according to a company presentation.
The capital raising could be upsized to $286 million if there is enough demand from both institutional and retail investors.
The company’s largest shareholder Tim Goyder, who has 14%, is partly but not fully participating, he added.
The trading halt is due to be lifted on Monday 11 August, ahead of the institutional placement settlement on Tuesday the 12th. The retail entitlement offer opens on Thursday 14 August and closes on 2 September, according to a company presentation.
The capital raising could be upsized to $286 million if there is enough demand from both institutional and retail investors.
Citi says Liontown Resources $266m raise unlikely to surprise market
More news: Citi analysts don’t expect the Liontown Resources’ $266 million raise to shock the market and had already forecast that the lithium miner would need additional liquidity in financial year 2026.
The analysts noted that Liontown is transitioning its operations to fully underground mining by the end of the first quarter of FY27 and they expect “this additional liquidity to quash questions on when Kathleen Valley will enter care and maintenance”.
Citi believes Liontown has timed its raise to take advantage of a share price rally. It has been the best ASX-listed lithium performer since the start of the year.
Liontown’s board intends to participate in the capital raise, including its chair Timothy Goyder who owns about 14% of the company, according to Capital IQ data. However, there is no comment on the intentions of Gina Rinehart’s Hancock Prospecting, which owns roughly 18%, making it Liontown's largest shareholder.
Liontown last raised about $376 million in October 2023.
Liontown shares are currently in a trading halt and last closed at 84 cents each. Citi analysts values Liontown at 50 cents per share based on a net asset value of 50 cents per share.
NRF leads Liontown Resources $266m institutional placement
The news: Lithium miner and processor Liontown Resources has launched a roughly $266 million fully underwritten institutional placement, which includes a $50 million commitment from the National Reconstruction Fund Corporation (NRF).
The numbers: The institutional placement aims to raise the headline figure through the issuance of shares at 73 cents each.
Liontown also announced a non-underwritten share purchase plan for existing eligible shareholders which aims to raise $20 million at the same price as the placement.
The offer price is a 13.6% discount to the last closing price of 84.5 cents on 6 August and a 10.4% to the five-day volume weighted average price. The company also said it reserves the right to accept over-subscriptions via a non-underwritten conditional placement.
The context: The NRF has joined the investment in Liontown as a “cornerstone investor”, investing $50 million at the offer price, with the shares issued to the government’s investment fund to be ranked equally with fully paid ordinary shares
Gina Rinehart's Hancock Prospecting is Liontown Resources' largest shareholder, holding just over an 18% interest, according to data collated by Capital IQ.
Proceeds from the raise will be used to “fortify Liontown’s balance sheet, provide a prudent liquidity buffer during a period of lower prices, support the ramp up and underground transition of the Kathleen Valley Lithium Operation and fund general corporate purposes and transactions costs”, according to a statement to the exchange.
At the end of July, Liontown missed its second-half sales and production guidance amid low spodumene prices. The company has also faced a cut in demand from customers as electric vehicle takeup in the US slows.
The Western Australian government gave Liontown Resources a $15 million interest-free loan to support its Kathleen Valley lithium project.
What they said: "Australia is well-positioned to be a competitive, long-term supplier of lithium to the rest of the world and local lithium production is important to the nation’s economic security and resilience,” NRF CEO David Gall said.
“Our investment in Liontown will help to attract private capital and develop Australia’s resources sector. It is aligned with the government’s strategy of transforming Australia into a global leader in the critical minerals supply chain," he said.
Liontown managing director and CEO Tony Ottavio said the company is “pleased to welcome NRFC as a cornerstone investor in Liontown” and flagged that its support is “a strong endorsement of Kathleen Valley’s strategic importance and long-term value”.
The sources: ASX, Citi Research
