Molycorp (MCP) Announces $300M Convertible Senior Notes, $150M Common Offering
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Molycorp, Inc. (NYSE: MCP) announced that it intends to offer and sell, subject to market and other conditions, $300 million aggregate principal amount (or up to an aggregate of $345 million aggregate principal amount if the underwriters of such offering exercise their over-allotment option in full) of its Convertible Senior Notes due 2017 (the “Notes”) (the “Notes Offering”) and $150 million of its common stock (the “Common Stock”) (or up to an aggregate of $172.5 million of Common Stock if Morgan Stanley & Co. LLC (“Morgan Stanley”), the underwriter of such offering, exercises its option to purchase additional shares of Common Stock in full) in separate registered public offerings.
The Company intends to use the net proceeds received from the Notes Offering and the Primary Shares Offering 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, including without limitation, capital expenditures at its Mountain Pass facility and other capital projects, as well as other cash requirements, such as cash payments in August 2012 to certain holders of the 5% subordinated unsecured convertible debentures of Molycorp Canada, the Company’s wholly-owned Canadian subsidiary.
Concurrently with the Notes Offering and the Primary Shares Offering, the Company intends to lend to Morgan Stanley Capital Services LLC (“MSCS”), an affiliate of Morgan Stanley, under a share lending agreement it expects to enter into with MSCS, up to $138 million of Common Stock (the “Borrowed Shares”), which Borrowed Shares the Company intends to offer through Morgan Stanley (the “Borrowed Shares Offering”) in a registered public offering. The Company is entering into the share lending agreement to facilitate the Notes Offering. The Company will not receive any proceeds from the Borrowed Shares Offering, but the Company will receive a nominal lending fee from MSCS for the use of the Borrowed Shares, which the Company intends to use for general corporate purposes.
The Borrowed Shares Offering is contingent upon the successful completion of the Notes Offering, and the Notes Offering is contingent upon the successful completion of the Borrowed Shares Offering. However, the Primary Shares Offering is not contingent upon the successful completion of either the Notes Offering or the Borrowed Shares Offering, and the Notes Offering and the Borrowed Shares Offering are not contingent upon the successful completion of the Primary Shares Offering.
Morgan Stanley and Credit Suisse Securities (USA) LLC (“Credit Suisse”) will act as joint bookrunners for the Notes Offering, and Morgan Stanley will act as sole bookrunner for each of the Primary Shares Offering and the Borrowed Shares Offering.
The Company intends to use the net proceeds received from the Notes Offering and the Primary Shares Offering 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, including without limitation, capital expenditures at its Mountain Pass facility and other capital projects, as well as other cash requirements, such as cash payments in August 2012 to certain holders of the 5% subordinated unsecured convertible debentures of Molycorp Canada, the Company’s wholly-owned Canadian subsidiary.
Concurrently with the Notes Offering and the Primary Shares Offering, the Company intends to lend to Morgan Stanley Capital Services LLC (“MSCS”), an affiliate of Morgan Stanley, under a share lending agreement it expects to enter into with MSCS, up to $138 million of Common Stock (the “Borrowed Shares”), which Borrowed Shares the Company intends to offer through Morgan Stanley (the “Borrowed Shares Offering”) in a registered public offering. The Company is entering into the share lending agreement to facilitate the Notes Offering. The Company will not receive any proceeds from the Borrowed Shares Offering, but the Company will receive a nominal lending fee from MSCS for the use of the Borrowed Shares, which the Company intends to use for general corporate purposes.
The Borrowed Shares Offering is contingent upon the successful completion of the Notes Offering, and the Notes Offering is contingent upon the successful completion of the Borrowed Shares Offering. However, the Primary Shares Offering is not contingent upon the successful completion of either the Notes Offering or the Borrowed Shares Offering, and the Notes Offering and the Borrowed Shares Offering are not contingent upon the successful completion of the Primary Shares Offering.
Morgan Stanley and Credit Suisse Securities (USA) LLC (“Credit Suisse”) will act as joint bookrunners for the Notes Offering, and Morgan Stanley will act as sole bookrunner for each of the Primary Shares Offering and the Borrowed Shares Offering.
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