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Galaxy Resources raises $161m for lithium development
Ashurst has advised on Galaxy Resources’ $161 million capital raising to fund lithium projects development.
Tony Zhang
Firm: Ashurst (Galaxy Resources).
Value: $161 million.
Area: Banking and finance, capital markets.
Key players: The Ashurst team was co-led by partners Roger Davies and Antonella Pacitti, assisted by senior associates Ben Stewart and Christopher Barry and lawyers Jacob Carmody, Toby Newnes, Ben Thomas, Joe Ablitt and Meng-Yeow Lim.
Deal significance: This forms part of a larger $161 million equity financing package that Galaxy will use to fund lithium projects in Argentina and Canada.
Stage one is underway at the company's Sal de Vida lithium brine project in Argentina, with engineering and design work expected to be completed by Q1 2021.
“Securing these funds is an important milestone for Galaxy as we seek to commit to execute and develop Sal de Vida into a successful, lowest-quartile cost lithium brine operation,” chief executive Simon Hay commented.
The equity financing comprises a one for 14 fully underwritten pro-rata accelerated non-renounceable entitlement offer to raise approximately $50 million and a concurrent institutional placement to raise approximately $111 million.
The institutional component of the entitlement offer and the placement closed on Wednesday, 25 November, raising $124 million. There was strong demand under the institutional offer and approximately 92 per cent take-up by eligible existing institutional shareholders. The retail component of the entitlement offer is due to open on Tuesday, 1 December 2020.
“We are delighted to be working with the Galaxy team on this significant equity financing transaction to fund development of Galaxy’s lithium projects in Argentina and Canada, and we look forward to supporting Galaxy to pursue its strategic objectives into the future,” Mr Davies commented.
