Molycorp Inc. (NYSE: MCP) has announced that it intends to offer and sell $300 million aggregate principal amount of convertible senior notes due in 2017 and $150 million of its common stock. The offerings would come to $345 million AND/OR up to $172.5 million, respectively, if Morgan Stanley exercises its overallotment option.
The use of proceeds is to fund operating expenses, working capital, capital expenditures and any other cash requirements for the remainder of 2012 and the first six months of 2013. In short, this offering is aimed to address the recent Standard & Poor’s downgrade. The fund usage includes capital expenditures at its Mountain Pass facility and other capital projects, and cash payments due this month to certain holders of the 5% subordinated unsecured convertible debentures of Molycorp Canada.
The company is also agreeing to lend Morgan Stanley shares up to $138 million in common stock to facilitate the note offering.
Morgan Stanley and Credit Suisse are sharing the notes offering book-runner status; Morgan Stanley will be the sole book-runner for the shares offering.
Molycorp shares are indicated down more than 9% at $10.95 against a 52-week range of $11.22 to $58.74. Before the effects of this offering, the market capitalization of Molycorp is $1.2 billion.
JON C. OGG
Take This Retirement Quiz To Get Matched With An Advisor Now (Sponsored)
Are you ready for retirement? Planning for retirement can be overwhelming, that’s why it could be a good idea to speak to a fiduciary financial advisor about your goals today.
Start by taking this retirement quiz right here from SmartAsset that will match you with up to 3 financial advisors that serve your area and beyond in 5 minutes. Smart Asset is now matching over 50,000 people a month.
Click here now to get started.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
