- Hot Chili (HCH) is set to undertake a private placement and share purchase plan (SPP) to raise $40 million
- Under the placement, more than one billion shares will be issued to investors at 3.2 cents to raise $35 million
- The share purchase plan will then issue more than 156 million shares to raise the remaining $5 million
- Hot Chili will use the funds to secure the final acquisition payment for a 100 per cent interest in its Cortadera copper-gold discovery in Chile
- Shares in Hot Chili are up a healthy 19.4 per cent on the market and are trading at 4.3 cents at 11:34 am AEST
Hot Chili (HCH) is set to undertake a private placement and share purchase plan (SPP) to raise $40 million.
The placement will raise $35 million while the share purchase plan will raise the remaining $5 million.
The company entered a trading halt on August 2 but did not disclose how much it intended to raise or what it would use the funds for.
At the same time, Hot Chili announced Glencore had agreed to acquire a 9.99 per cent interest in the company.
Glencore now has the right to appoint a Director to the board of Hot Chili as well as appoint members to the Technical Steering Committee.
Placement
Under the placement, 1,093,750,000 new fully-paid ordinary shares will be issued in two phases to sophisticated, institutional and professional investors at 3.2 cents.
This price represents an 11.1 per cent discount to Hot Chili’s last closing price of 3.6 cents and an 11.6 per cent discount to the 15-day volume-weighted average price.
Glencore will subscribe for $13.93 million while an associated entity of Hot Chili’s Chairman Murray Black will subscribe for $3 million, however, this is subject to shareholder approval.
Share purchase plan
A total of 156,250,000 new shares will be issued under the SPP at the same price as the placement of 3.2 cents.
The plan will open on August 17 and is expected to close on September 10.
Hot Chili will use the funds to secure the final acquisition payment of US$15 million (A$20.3 million) for a 100 per cent interest in its Cortadera copper-gold discovery.
The company is also fully-funded to deliver a resource upgrade and a pre-feasibility study for its Costa Fuego Project in Chile.
Managing Director Christian Easterday commented on the placement and what the funds will be used for.
“The $40 million funding secures ownership of Cortadera, and Glencore’s investment and involvement is a strong endorsement of our future,” Mr Easterday said.
Shares in Hot Chili were up a healthy 19.4 per cent on the market and were trading at 4.3 cents at 11:34 am AEST.