The West Australian reported that BC Iron surged more than 9% after the iron ore miner raised USD 47 million in a placement at a premium as part of a deal with Fortescue Metals Group to take a bigger stake in its Nullagine JV project.
BC said that it would lift its stake in Nullagine from 50% to 75% by buying a 25% stake from JV partner FMG for USD 190 million.
The company said that it’s planned USD 47 million placement to help pay for the transaction had been priced at USD 3.04, a significant premium to its last traded price of USD 2.93.
Mr Mike Young MD of BC Iron's said that the placement was well supported by new and existing institutional shareholders.
Mr Young said that "This strong support is evidenced by the Placement price achieved at a premium to BC Iron's last closing price, affirming our view that this is a strategically compelling transaction which is expected to be accretive for all BC Iron shareholders."
He said that "This transaction has also allowed BC Iron to grow its institutional shareholder base which is expected to increase investor interest and improve liquidity."
BC Iron added that the SPP price would be the lower of the placement price and the volume weighted average price of shares over the 5 business days immediately prior to the opening date.
