The Lynas share price was flat today as the company announced completion of its retail entitlement offer to investors.
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The Lynas Corporation Ltd (ASX: LYC) share price was flat today, moving to 0.00% to remain at $2.39. Lynas Corporation announced this morning that it had completed its retail entitlement offer.
What was the offer?
Lynas shareholders were offered the right to purchase 1 Lynas share for every 7.7 shares held at 7pm on the record date. The issue price was $2.30 per share. The retail offer closed on 7 September 2020 at 5pm Sydney time.
Lynas said retail shareholders supported the offer with a take-up rate of approximately 44%. The company will issue 22 million shares. It raised $60 million from investors, including $10 million from shareholders who applied for additional shares. With these shareholders included, the total take-up rate was approximately 53%.
There were 23 million shares that were not taken up under the offer. These will be allotted to the sub-underwriters of the retail entitlement offer.
Additionally, Lynas completed an institutional rights issue and institutional placement. The total amount raised from retail and institutional investors was $425 million.
The funds raised from the capital raising will be put toward a new rare earths processing facility in Kalgoorlie, Western Australia and an upgrade of the company’s processing plant in Malaysia.
Lynas’ operations are considered of national interest to both Australia and the United States. China accounted for at least 85% of rare earth materials production in 2019 and has restricted supply in the past. Lynas’ Mt Weld deposit in Western Australia is acknowledged as one of the highest grade rare earths mines in the world.
About the Lynas share price
Lynas is a rare earths miner and processor with assets in Australia and Malaysia along with a plan to build a processing plant in the US. The company has been listed on the ASX since 1986.
In the year to 30 June 2020, Lynas had revenue of $305.1 million. The company’s earnings before interest, tax, depreciation and amortisation (EDITDA) in the 2020 financial year were $59.8 million, down from $100.7 million in the 2019 financial year. The company experienced a production halt during the 2020 financial year as a result of COVID-19 which affected its results.
The Lynas share price has soared 312% since its 52-week low of 58 cents. It is up 4.37% since the beginning of the year and in line with this time last year.
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