IGO won’t invest in Panoramic Resources’ $40m raise; discount at 45.7pc

afr.com:

WA nickel, copper and cobalt explorer Panoramic Resources’ largest shareholder – and former suitor – IGO Limited won’t open its chequebook for a deeply discounted $40 million raising that is currently underway, Street Talk can reveal.

IGO boss Matt Dusci has said not to an equity raising from Panoramic Resources, where IGO is a 21 per cent shareholder. 

The $40 million placement is priced at 5¢ a share, a whopping 45.7 per cent discount to the last close and 48.2 per cent lower than the five-day volume weighted average price. Canaccord Genuity and Morgans are the joint lead managers, while Foster Stockbroking is a co-manager. Bids are due at 3pm Wednesday. The placement is underwritten.

It is understood IGO has decided not to invest in Panoramic’s cash call, meaning its 21.02 per cent shareholding would be diluted when the raise is done and dusted.

However, IGO would vote in favour of the raising to allow the company to raise a sum greater than its annual raising capacity, sources said. Panoramic’s second-largest shareholder, Zeta Resources is expected to tip in $10 million.

It’s an interesting turn of events in Panoramic’s M&A potential. Just 3½ years ago, IGO liked Panoramic enough to lob a $312 million off-market takeover bid.It eventually withdrew the offer, saying post-bid disclosures around Panoramic’s funding needs for Savannah project meant an acquisition no longer stacked up.

Fast-forward to mid-2022 and IGO ended up owning 21.02 per cent of Panoramic, thanks to its $1.3 billion acquisition of Western Areas which had built a 19.9 per cent stake in the explorer in a previous equity raising. 

IGO’s decision to sit out Panoramic’s latest raise comes days after it slashed the value of projects acquired from Western