- Coal explorer Stanmore Resources (SMR) is raising US$506 million (A$693 million) to partially fund the acquisition of an 80 per cent stake in BHP Mitsui Coal (BMC)
- The buy is costing the company US$1.2 billion (A$1.64 billion) and is considered a ‘transformational’ acquisition
- The pro-rata accelerated renounceable entitlement offer is priced at $1.10 per share, a 12 per cent discount to the last close and 3.9 per cent discount to TERP
- GEAR (via Golden Investments) committed to subscribe for US$300 million (A$410.2 million) of its entitlements and Petra Capital will underwrite the remaining US$206 million (US$283 million)
- Stanmore also confirmed a US$120 million (A$164 million) facility agreement which will mature in 3 years from date of agreement, triggering a trading halt
- Stanmore shares stand at $1.25 each prior to entering the trading halt
Coal explorer Stanmore Resources (SMR) is set to acquire an 80 per cent stake in BHP Mitsui Coal (BMC) for US$1.2 billion (A$1.64 billion), as a joint venture in Queensland.
To fund the acquisition, the company said it would raise about US$506 million (A$693 million) through a pro-rata accelerated renounceable entitlement offer.
Stanmore will issue approximately 631 million new shares representing about 233 per cent of current Stanmore shares on issue. The new shares will be priced at $1.10 each, a 12 per cent discount to the last closing price and a 3.9 per cent discount to the theoretical ex-rights price (TERP).
GEAR (via Golden Investments) committed to subscribe for US$300 million (A$410.2 million) of its entitlements and is expected to have a 64 per cent voting power in Stanmore after the raise, down from the 75 per cent it held before.
GEAR’s renounced rights will be sold through an institutional bookbuild.
The remaining amount of US$206 million ($283 million) was underwritten by Petra Capital who had already received commitments from new institutional investors for the total amount it’s underwriting, according to the term sheet.
The company also announced a US$120 million (A$164 million) facility agreement with Virtue Investments Corporation and Ascend Capital Advisors.
The facility agreement will be secured against certain assets of Stanmore’s subsidiary, Stanmore IP Coal as first ranking security.
The $120 million funding will mature three years from the date of the facility agreement and will have an interest rate of eight per cent per annum.
Reborrowing is permitted and the secured assets include a Bucyrus 1370W Dragline and call coal handling preparation plant infrastructure located at the Isaac Plains Complex.
As a result of these two announcements, the company has entered a trading halt as of March 3 and is expected to recommence trading on Monday, March 7.
Stanmore shares were trading at $1.25 each on March 2.