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- Lynas Corporation (LYC) has announced plans to raise $425 million dollars in equity via a placement and entitlement offer
- The company said proceeds from the equity raising will be used to fund major projects, which are expected to be completed by 2023
- Under both deals, shares will be priced at $2.30 each, an 11.9 per cent discount on the share’s last closing price
- Lynas also released its full FY20 results today, showing it had suffered drops in revenue and EBITDA compared to FY19
- The changes are being blamed on COVID-19, which saw production at its Malaysian plant grind to a halt
- Shares in Lynas last traded for $2.61 per share
Rare earth miner Lynas Corporation (LYC) has announced it plans to raise $425 million dollars in equity via a placement and entitlement offer.
The majority of the money raised will be used to fund a new major project for Lynas, which said it expects to deliver by 2023.
Equity raise
The equity raise consists of a fully underwritten 1-for-7.7 pro-rata accelerated non-renounceable entitlement offer and institutional placement.
Under the placement, approximately 92 million new fully paid ordinary shares will be issued to new and existing investors, to raise $211.6 million.
The new shares will be priced at $2.30 each, an 11.9 per cent discount on the share’s last closing price.
Meanwhile, under the entitlement offer, eligible shareholders will be offered one new share for every 7.7 already held.
Around 92.9 million new shares will be issued under the offer — raising $213.7 million.
The new shares will again be priced at $2.30, and both offers will settle on Tuesday, August 25.
FY20
Along with the equity raise, Lynas also released its full FY20 results, showing its earnings and revenue had decreased over the period.
Its revenue totalled $305.1 million in FY20, a decrease on the $363.5 million recorded in the previous period.
Meanwhile, EBITDA also decreased — down from $100.7 million at the end of FY19 to $59.8 million at the end of this financial year.
Lynas said the fall in earnings was primarily due to the six-week temporary shutdown of its Malaysia plant, in accordance with the Malaysian government’s COVID-19 lockdowns.
Speaking on the result, Lynas Corporation CEO and Managing Director, Amanda Lacaze, said it was disappointing.
“Our company entered the COVID-19 pandemic in robust financial shape, as a result of a number of years of prudent capital management,” he said.
“However, our FY20 financial performance has been affected by the COVID-19 related shutdown as well as lower market prices and the temporary production halt in December after we reached the annual concentrate processing limit for CY19,” she added.
Lynas ended FY20 cashflow positive and also had $101.7 million in the bank at the end of the financial year.
It said with the additional $425 million it plans to raise via the entitlement offer and placement, the company will be well-funded for future growth.
In particular, the equity will allow Lynas to finalise its planned Kalgoorlie rare earth processing facility and upgrade its Malaysia plant.
Shares in Lynas remain in a trading halt, last trading for $2.61 per share.
