Western Areas prices $125m convertible bond
Western Areas NL (WSA) announced the pricing of an issue of $125 million of convertible bonds due 2015. The company said the bonds are to be issued a premium of approximately 28% to the last price of Western Areas shares prior to the launch of $5.18 per share and carry a coupon of 6.4%.
Western Areas said the offer was significantly oversubscribed, with strong demand from investors in all major capital markets including the United Kingdom, Europe, and Asia Pacific.
Managing director, Julian Hanna, said the transaction would enable Western Areas to pay down all its bank debt and provide the company with balance sheet flexibility to enable it to advance its exploration and mine development initiatives.
Specifically, the company said $45 million of the proceeds would be used to fully repay and cancel a BHP Billiton facility which was provided as part of the off-take agreement, while $60 million would be used to repay what has been drawn from the ANZ Facility, which remains in place until 31 March 2012.
Western Areas said proceeds would also be used to complete the feasibility study at the high grade Spotted Quoll underground mine and fund further drilling of advanced targets at its Forrestania Project and other joint venture interests in Western Australia.
“The effect of repayment of the BHP Billiton and ANZ Facilities will be to extend the maturity of some of the Company's existing loan debt profile until 2015, at a lower average interest rate,” the company said.
As at 1047 AEDT, Western Areas shares were down 25c to $4.93.
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