By Sheri Kasprzak
Atlanta, Feb. 17 - Fortescue Metals Group Ltd. said it plans to raise US$50 million in a private placement of notes.
The company plans to sell unsecured convertible notes in the offering. The notes mature in six years and are convertible into common shares at A$6 each. The notes do not bear interest for the first three years but then will have a 5% coupon thereafter.
Fortescue may force the conversion of the notes if its stock trades above A$7.50 in the first three years.
The company plans to use the proceeds from the offering to fund a 10% deposit on the construction of its Pilbara iron ore and infrastructure project. The company has reached agreements for the construction with China Railway Engineering Corp., China Metallurgical Construction Corp. and China Harbour Engineering Corp.
Fortescue, based in Perth, Australia, is an iron-ore drilling company.
| Issuer: | Fortescue Metals Group Ltd.
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| Issue: | Unsecured convertible notes
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| Amount: | US$50 million
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| Maturity: | Six years
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| Coupon: | No interest for three years; 5% annually thereafter
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| Conversion price: | A$6.00
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| Call: | May force conversion if stocks trade above A$7.50 in first three years
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| Warrants: | No
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| Pricing date: | Feb. 17
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| Stock price: | A$3.65 at close Feb. 17
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