Molycorp Inc. on Friday offered pricing and other details of the offer of convertible notes and stock it announced the day before.
The Greenwood Village-based rare-earths miner (NYSE: MCP) said it will sell at least $360 million in covertible senior notes due 2017 at 6 percent. The sale could rise to $414 million if underwriters exercise over-allotments, the company said.
It also said it will offer 12 million shares of common stock at $10 a share, or as much as 13.8 million through over-allotments.
(Shares closed at $11.16 Thursday and were lower in Friday trading; click here for a live quote from Yahoo Finance.)
Molycorp said it will use the proceeds for operating expenses, working capital and expenses through mid-2013.
It said it expects the notes and stock offers to close Aug. 22.
The move comes a few days after Standard & Poor?s Ratings Service lowered its corporate credit rating of Molycorp deeper into ?junk? territory, to CCC+ from B, and placed the company on ?CreditWatch with developing implications? status, citing liquidity issues.
Molycorp is in the middle of a $895 million redevelopment of its rare-earths mine in Mountain Pass, Calif.
It also acquired $230 million of 5 percent convertible notes when it bought Canada?s Neo Material Technologies Inc., a major rare-earths processor now known as Molycorp Canada, in a $1.3 billion cash-and-stock deal in June. Holders of those notes can put them back to the company this month under a change-of-control covenant.
?We believe that the company?s liquidity is likely to be inadequate to both complete the build-out of its key Mountain Pass mining operation and to address [its] convertible bonds,? S&P said of Molycorp earlier this week.
Mark Harden is print and digital content editor for the Denver Business Journal and writes for the "Broadway & 17th" blog. Email: mharden@bizjournals.com. Phone: 303-803-9227.
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