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Three firms were involved in negotiating a contractor issue and capital raising for Atlas Iron Ltd in response to falling iron ore prices.
Firms: Ashurst (Atlas), Herbert Smith Freehills and Johnson Winter & Slattery (McAleese Ltd)
Value: $180m
Area: Finance
Key players: Ashurst partners from the corporate team were Antonella Pacitti (pictured), Roger Davies and Adam Conway. Restructuring specialist James Marshall and disputes specialist Lucas Wilk also assisted.
Deal significance: Following the drop in iron ore prices, Atlas announced it would progressively suspend its mining operations and requested a voluntary suspension of quotations on its shares.
On April 30, Atlas announced mining would continue at certain locations after the contractor collaboration agreement and capital structuring proposal were formulated.
Under the contractor collaboration agreement, contractors have agreed to a lower rate structure for two years but will receive an uplift once the price of iron ore rises and a total of 25 per cent of applicable positive net operating cash flows.
Moreover, each of the key contracts has agreed to subscribe for Atlas securities worth $23 million in aggregate. Additional contractors are expected to subscribe for securities under the contractor issue, to a value up to $7 million.
Under the capital raising proposal, Atlas will place shares of up to $50 million to retail and institutional investors. The company will also make a shareholder participation offer to shareholders to raise up to $100 million.
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