MMG to raise $1.6 billion through share placement and convertible bonds

Mining company MMG Ltd. (1208.HK) announced on Monday it plans to raise HK$12.62 billion ($1.61 billion) through a share placement and convertible bond sale, with proceeds earmarked for debt refinancing, project expansion, strategic acquisitions and investments, as well as general working capital.

The company will place 705.9 million new shares at HK$8.88 each, representing about 5.5% of its enlarged share capital. The placement price represents a discount of about 8.8% to Friday’s closing price of HK$9.74. Net proceeds are expected to total approximately HK$6.25 billion.

At the same time, MMG plans to issue $800 million worth of zero-coupon convertible bonds due in 2027 at 102% of the principal amount. The initial conversion price is set at HK$10.21 per share, representing a premium of about 4.8% to Friday’s closing price. Assuming full conversion, the bonds would be convertible into about 614 million shares, equivalent to roughly 5.1% of the company’s existing issued share capital.

MMG said 43% of the proceeds will be used to refinance existing shareholder loans and external borrowings, 29% will fund ongoing project development and expansion plans, 22% will be allocated to strategic acquisitions and investments, with the remainder for use as working capital and general corporate purposes.

Shares of MMG opened lower on Tuesday, trading at HK$8.76 by the midday break, down 10.06%.

By Lee Shih Ta

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