The news, announced yesterday along with the company’s December quarterly results, comes after a trading halt which began mid-November.

The press speculation that ANZ was no longer backing the $A255 million Baralaba expansion project finance facility it offered last year turned out to be well founded.

“Market conditions have rendered the previously announced ANZ project financing facility untenable, and made it necessary for Cockatoo to cancel the facility,” Cockatoo said.

Noting that it decided on the equity raising path after an “exhaustive process evaluating multiple alternatives”, Cockatoo has reduced the capital expenditure budget for the mine expansion (from 1 million tonnes per annum to 3.5Mtpa of saleable coal) to the $125 million targeted by its pro-rata entitlement offer.

The shares are priced at a dilutive 0.02c each with an entitlement ratio of 13.7 new shares for every share held.

The price represented an 86% discount to the 1.4c share price close on November 12.

It is fully underwritten by BBY and supported by existing cornerstone investors Noble Energy and PT Harum Energy plus a new US-based investor Liberty Metals and Mining.

Commodities trader Noble also landed a 28.5 million tonnes offtake agreement for the mine’s output.

Cockatoo said this agreement provides greater certainty on the mine’s ability to sell its PCI-grade metallurgical coal for the next 20 years.

The Queensland junior will also make board changes with Noble, Liberty and Harum each to appoint a director each to Cockatoo’s board.

“The company’s shares will remain in suspension until the results of the institutional bookbuild are released prior to market opening on 10 February 2015,” Cockatoo said.

Cockatoo also achieved cost savings with its expansion project “via a reduction in required employees by more than 25%”