18/11/2021 - 11:37

AustralianSuper, Stokes back $360m potash fundraising

18/11/2021 - 11:37

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BCI Minerals is set to receive a $175 million cash injection from AustralianSuper and $110 million from major stakeholder Kerry Stokes to get its $1.2 billion potash project up and running.

AustralianSuper, Stokes back $360m potash fundraising
BCI Minerals has already received significant government funding for Mardie. Photo: Attila Csaszar

BCI Minerals is set to receive a $175 million cash injection from new shareholder AustralianSuper and $110 million from major stakeholder Kerry Stokes to get its $1.2 billion Mardie potash project up and running. 

The $360 million capital raising was announced by the West Perth-based miner today as part of a $1.2 billion debt and equity funding scheme required to construct and ramp-up the Pilbara-based Mardie salt and potash project.

Once completed, the project will produce 5.35 million tonnes of salt and 140,000 tonnes of SOP each year over a mine life of more than 60 years.

BCI is aiming to raise $240 million at 43 cents apiece through a placement, which was backed by industry giant AustralianSuper and Kerry Stokes’ private company Wroxby, which already owns a 40 per cent stake in BCI.

Existing shareholders Ryder Capital, Ryder Capital Management and Sandon Capital have committed $32 million under the placement, with the balance underwritten by lead manager Canaccord Genuity.

Retail investors will be able to access company shares, which are discounted at 10.4 per cent on Tuesday’s closing price, via a $20 million share purchase plan.

BCI has the option to raise a further $100 million via the issue of convertible notes to AustralianSuper at an exercise price of 62.35 cents, a 45 per cent premium on the placement offer price.

An unusual feature of the capital raising is that BCI has agreed to purchase AustralianSuper’s shareholdings in two other potash plays.

It will buy 15 per cent of ASX-listed Agrimin, worth about $15 million, and 7 per cent of Highfield Resources, worth about $13 million.

An extraordinary general meeting is set to be held on or around December 20 to allow shareholders to vote on the funding.

With the $360 million capital raising under way, $100 million in cash reserves, Iron Valley royalty streams and a proposed $40 million corporate debt facility, BCI says it has the capital needed to fulfill its $460 million equity obligation.

The remaining $740 million needed for the project consists of a $490 million loan from the Northern Australia Infrastructure Facility, $110 million from Export Finance Australia and $140 million in bank facilities.

Chief executive of Wroxby’s parent company Australian Capital Equity, Ryan Stokes, said Mardie would become one of the largest solar salt projects in the world.

“The ACE Group is pleased to make a substantial commitment of approximately $100 million for New Shares, to support the Mardie Project,” he said.

“We believe that Mardie is a world-class salt project that will create substantial value for BCI shareholders, the local community, Western Australia over many decades.”

Today’s announcement marks the latest development in a string of hopeful salt and potash projects in the state.

 

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