FMG 2.02% $25.70 fortescue ltd

a$70 million capital raising completed

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    A$70 million Capital Raising Completed

    Fortescue Metals Group Ltd (“Fortescue Metals”) is pleased to announce the injection of A$70 million of new funding into the Company through a convertible note issue, the exercise of options and an additional significant sales contract with prepayment. The A$70 million provides a substantial buffer to the Company’s budgeted costs through to financial close, beyond the Definitive Feasibility Study. The funding has been raised in three transactions, designed to minimise dilution of shareholders’ equity.

    Exercise of Options - A$7 million Raised

    Fortescue Metals’ Directors and senior management have injected A$7 million into the Company through the conversion of outstanding options several years before the expiry of their term. This is a further demonstration of the commitment of the Board and executive group to the Company.

    Sales Contract Prepayment - A$23 million Raised

    Fortescue Metals has signed a further sales contract with an international steel mill for the delivery of 1.5 million tonnes per annum of iron ore for 20 years. The contract includes a prepayment obligation of A$23 million to be made in instalments, with the final amount payable prior to financial close. The steel mill has requested its identity remain confidential for commercial reasons. Fortescue Metals now has committed contracts with customers for 9.5 million tonnes per annum, and prepayments totalling A$90 million.

    Convertible Notes @ A$4.50 Exercise Price - A$40 million Raised

    Investment funds advised by New York and Connecticut based DKR Saturn Management L.P. (“DKR”), being a U.S. investment management firm, have subscribed for unsecured Convertible Notes in Fortescue Metals for an amount of A$40 million. The Notes have a term of six years and an exercise price of A$4.50 which is significantly above the last trading price of FMG of A$2.90 per share. During the term, DRK has the right to convert to FMG shares at the agreed A$4.50 exercise price. Fortescue Metals has the right to call for conversion of the Notes at the A$4.50 exercise price should FMG shares trade in excess of A$6.00 over the first three years. Notwithstanding, if the Notes have not already been converted and at the end of the 2005 calendar year FMG shares are trading below A$4.10, DKR may reduce their conversion price to 110% of the then market value.

    If not converted during the six year term, the unsecured Convertible Notes will be redeemed by FMG. Further, the Notes are interest free over the first three years of the term following which time they attract a 5% interest rate for the final three years.

    DKR is an affiliate of U.S. based investment management firm, DKR Capital Inc, with over US$4 billion in assets under management was introduced to Fortescue Metals by Australian broking group BBY Limited.

    Fortescue Metals is progressing a number of other negotiations with steel mills, contractors and major investors in its inexorable march to project delivery.


    Yours sincerely

    Fortescue Metals Group Ltd





    Rod Campbell

    Company Secretary
 
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Last trade - 16.10pm 28/03/2024 (20 minute delay) ?
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