The use of proceeds is to fund operating expenses, working capital, capital expenditures and any other cash requirements for the remainder of 2012 and the first six months of 2013. In short, this offering is aimed to address the recent Standard & Poor’s downgrade. The fund usage includes capital expenditures at its Mountain Pass facility and other capital projects, and cash payments due this month to certain holders of the 5% subordinated unsecured convertible debentures of Molycorp Canada.
The company is also agreeing to lend Morgan Stanley shares up to $138 million in common stock to facilitate the note offering.
Morgan Stanley and Credit Suisse are sharing the notes offering book-runner status; Morgan Stanley will be the sole book-runner for the shares offering.
Molycorp shares are indicated down more than 9% at $10.95 against a 52-week range of $11.22 to $58.74. Before the effects of this offering, the market capitalization of Molycorp is $1.2 billion.
JON C. OGG
Contact [email protected] for any questions or corrections.
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