Australia’s next rare earths producer, Hastings Technology Metals Limited (ASX: HAS) announced that it has received firm commitments for a share placement to institutional, sophisticated and professional investors and provided details about a Share Purchase Plan (SPP) and Conditional Placement.
Hastings has received firm commitments to raise $14.6 million (before costs) at $0.125 per share (Placement).
An additional $3.1 million to be raised via a Conditional Placement and a further $3.0 million to be raised from a fully underwritten Share Purchase Plan (SPP).
Strong interest received from existing shareholders and new institutional and sophisticated investors resulted in a significantly over subscribed Placement.
Funds will be used to advance the company’s flagship Yangibana Project.
The Placement will raise approximately $14.6 million (before costs) from the issue of approximately 117 million new fully paid ordinary shares in the Company to institutional, sophisticated and professional investors.
The offer price of A$0.125 per New Share represents a 21.9% discount to the last traded price of A$0.16 (on 21 August 2020) and a 9.8% discount to the Company’s 10 day VWAP of $0.139.
New Shares are expected to be issued on or around Tuesday, 1 September 2020 and will be issued without shareholder approval under the Company’s remaining placement capacity under LR7.1 and LR7.1A (21,900,000 shares under LR7.1 and 95,290,000 shares under 7.1A). For the purposes of LR7.1A the 15-day VWAP is $0.138.
SPP and Conditional Placement
The Company received applications significantly in excess of the Placement size. Taking this into consideration and the broad shareholder base of more than 2,000 shareholders within Australia and New Zealand, the Board has decided to conduct a fully underwritten SPP to raise up to an additional $3.0 million and enable all eligible shareholders to participate in the Capital Raise at the same price as the Placement. Details of the SPP are expected to be sent to eligible shareholders within a week.
The record date for the SPP will be 21 August 2020.
Given the significant level of demand and to accommodate as many new investors as possible, a number of cornerstone investors who anchored the Placement prior to launch had to be significantly scaled back.
The Company has elected to increase the size of the Placement by approximately $3.1 million, to accommodate these investors, of which $2.6 million will be conditional on shareholder approval at an upcoming General Meeting to enable the Company to refresh its capacity to issue new shares under Listing Rule 7.1. (Conditional Placement), and a further $0.5 million subject to approval outlined below.
The Company’s Chairman, Mr Charles Lew, will participate in the raise for an amount of $0.5 million, subject to shareholder approval at the Annual General Meeting in November 2020. As far as the Company is aware, no other New Shares will be issued or agreed to be issued in the Placement or Conditional Placement to a related party, or otherwise to any person referred to in Listing Rule 10.11.
New shares issued under the Placement and shares issued for the SPP and Conditional Placement will rank equally with existing fully paid shares of the Company. Total funds raised under the Placement, SPP and Conditional Placement are expected to total approximately $20.7 million.
Ord Minnett Limited acted as the Lead Manager to the Placement.