The 16-for-one non-renounceable entitlement offer at an issue price of 2c to eligible shareholders will seek to raise $22 million, while a placement of 10.25 million shares to investors to raise about $200,000 will be undertaken, with firm commitments already received.
The issue price represents a 42.9% discount to Laneway’s last closing price at 3.5c and a 36.4% discount to the company’s volume weighted average price of 3.1c per share.
Laneway, previously known as Renison Consolidated, said the capital raising and associated conversion of existing debt facilities to shares was the next step in its restructure which was flagged last October.
Since 2006, Laneway has been almost entirely dependent for capital on funds advanced to it by Bizzell Nominees, an entity related to Laneway chairman Stephen Bizzell.
Laneway believes the entitlement offer will potentially facilitate the conversion of all of Laneway’s $18.9 million liability to shares under the Bizzell Nominees loan facility.
Bizzell Capital Partners is lead manager to the capital raising and has underwritten $20.3 million of the entitlement offer.
At the conclusion of the offer, Laneway will be debt free and, depending on the take-up of the entitlement offer, expects to have up to $3 million for exploration and working capital requirements.
Funds from the raising will enable the company to undertake drilling, geophysical surveys and surface rock chip sampling at Queensland’s Agate Creek gold project and at New Zealand’s gold project, progress feasibility studies for Agate Creek as well as help fund exploration at its New South Wales coking coal projects.
The company plans to kick off a drilling program at Agate Creek next week.
Laneway, which is reviewing project opportunities, said its recapitalisation was well advanced.
As well as a name change, the recapitalisation consists of share consolidation and implementing cost reduction opportunities.
“By recapitalising the company, the board also believes that in addition to progressing its existing project portfolio it will position Laneway as an attractive vehicle to acquire additional assets at a time of depressed resource project valuations,” the company said.
Laneway had $22,000 cash on hand at the end of the March quarter.
