Liontown begins crossings for $400m equity raise; touts $760m debt
UBS began wall crossing fund managers for lithium developer Liontown Resources’ emergency capital raising on Wednesday evening, seeking $400 million from equity capital markets to go alongside $760 million in debt.
Liontown Resources chairman Tim Goyder. Trevor Collens
Shares were being offered at $2.20 to $2.60 apiece, which would be a significant premium to the $1.52 a share that Liontown was trading at in March before its disclosed Albemarle’s M&A interest in the company.
Sources said Liontown chairman Tim Goyder would tip in about $10 million, but Gina Rinehart’s commitment wasn’t clear.
Prospective investors were being told Liontown had found backers for $760 million in debt, with government agency Export Finance Australia being cited as one of the lenders.
Put it together and that’s $1.16 billion of funding that Liontown Resources is chasing after being left on the altar by Albemarle, a suitor that it spurned for nearly a year before giving it a look at its books in September.
It should be a long night for Liontown’s camp, which includes UBS, Greenhill & Co and law firm Allens, as they try to convince investors to tip in.
It was still a moving feast at 7pm, but the company would be aiming to have the final deal size and pricing locked in for an announcement on Thursday morning.
Naturally, some real-money funds think $2.20 to $2.60 a share is too high a price for Liontown to kick off raising talks now that the immediate M&A control premium has evaporated.
Questions were also being asked about how firm the commitments for $760 million in debt were, although Liontown has been working on the financing for a while.
Lastly, there’s also the question of how short sellers could influence the pricing. The initial version of
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