Western Areas raises $125m

Nickel miner Western Areas says it received strong interest in its convertible bonds issue that raised $125 million, which will partly be used to pay debts with BHP Billiton and ANZ.

The miner yesterday entered a trading halt as it sought funds from investors, predominately in the UK, Europe and Asia Pacific.

The bonds were issued at a premium of about 28 per cent to the last traded price of Western Areas before the launch of $5.18, and carry a coupon of 6.4 per cent.

The bonds are convertible into Western Areas shares at an initial conversion price of $6.61 per share.

Shares in Western Areas, which this morning exited its trading halt, were down 27c to $4.91 at 11:26 AEST.

Western Areas said the offer was significantly oversubscribed.

"The issue of these convertible bonds forms part of a well considered growth strategy for the company," managing director Julian Hanna said.

"This transaction will enable Western Areas to pay down all its bank debt and provide the Company with balance sheet flexibility to enable it to advance its exploration and mine development initiatives."

In particular, the funds will be used to fully repay and cancel the $45 million BHP Billiton facility, provided as part of the offtake agreement, and repay $60 million that was drawn from the ANZ facility.

The facility remains in place until March 31 2012.

Funds will also be used to complete the feasibility study into the Spotted Quoll underground mine and further exploration programs at the Forrestania project.