Secured financing through facilities, sale and leaseback of equipment
By Susanna Moon
Chicago, Aug. 6 – Molycorp, Inc. said it obtained a commitment letter for $400 million of five-year financing with funds managed by Oaktree Capital Management, LP.
Under the agreement, Oaktree will provide Molycorp and some of the company's subsidiaries up to $400 million of secured financing through credit facilities and the sale and leaseback of equipment at the company's Mountain Pass facility, according to a company press release.
Of the financing, $250 million will be available at the closing, with the remaining $150 million available until April 30, 2016 if Molycorp satisfies financial and operational conditions.
The financing will be secured by Molycorp assets and assets of the company's subsidiaries and will also be guaranteed by most of the company's subsidiaries.
In connection with the financing, Molycorp will issue to Oaktree warrants for shares of the company's common stock equal to 10% of the company's outstanding stock at closing.
Molycorp is a Greenwood, Colo.-based rare earths metals exploration company.
| Issuer: | Molycorp, Inc.
|
| Issue: | Loan
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| Amount: | $400 million
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| Maturity: | Five years
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| Warrants: | For shares of the company's common stock equal to 10% of the company's outstanding stock at closing
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| Investor: | Funds managed by Oaktree Capital Management, LP
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| Announcement date: | Aug. 6
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| Stock symbol: | NYSE: MCP
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| Stock price: | $2.02 at close Aug. 5
|
| Market capitalization: | $499.21 million
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