- Nickel Mines (NIC) has completed the institutional component of its $364 million fully underwritten entitlement offer
- The institutional component raised $275 million at 94 cents per share and the retail component will aim to raise a further $89 million
- The entitlement offer is partly funding the acquisition of a 70 per cent interest in the Angel Nickel Project in Indonesia
- Nickel Mines is paying US$490 million (roughly A$659.7 million) over two tranches to acquire the nickel project
- The retail portion of the raise will open on Wednesday, December 9 and close on Friday, December 18
- Company shares are down 4.28 per cent and trading at 98.5 cents
Nickel Mines (NIC) has completed the institutional component of its fully underwritten two-for-11 accelerated pro-rata non-renounceable entitlement offer.
The company detailed the total $364 million raise on Wednesday, December 2. Of this, $275 million was raised under the institutional component at 94 cents per share.
The entitlement offer will partly fund the US$490 million (roughly A$659.7 million) acquisition for a 70 per cent interest in the Angel Nickel Project.
In October, Nickel Mines entered definitive agreements with Shanghai Decent Investment Group and its affiliate company, Decent Resource to acquire 70 per cent of the project which is located within the Indonesia Weda Bay Industrial Park.
Majority of the funds from the institutional entitlement offer will be put towards funding the first of two acquisition payments. The first payment will be a total of US$210 million (roughly A$282.8 million) — payable by no later than March 31, 2021.
The remaining funds will help to strengthen Nickel Mines’ balance sheet and provide working capital.
“This transaction is transformative for the company and is expected to approximately double the company’s nickel production capacity,” Managing Director Justin Werner said.
“It will provide us with operational footprints within what are estimated to become the world’s two largest nickel production centres and further cements and extends our excellent relationship with Shanghai Decent,” he added.
A further $89 million is set to be raised under the retail component of the entitlement offer, which is fully underwritten. This component will open on Wednesday, December 9 and will close on Friday, December 18.
Additionally, Shanghai Decent (which is also the company’s largest shareholder), has provided a sub-underwriting commitment as part of the retail entitlement offer.
Company shares are down 4.28 per cent and trading at 98.5 cents at 2:35 pm AEDT.