The Pilbara Minerals Ltd (ASX: PLS) share price is pushing higher again on Tuesday following an announcement.
In afternoon trade the lithium miner's shares are up over 2.5% to 73 cents.
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What did Pilbara Minerals announce?
This afternoon Pilbara Minerals announced that it has entered into a share sale agreement with the receivers and managers of Altura Mining.
This agreement is for the acquisition of the shares in Altura Lithium Operations, which owns Altura's Pilgangoora Lithium Project. The two parties have agreed a fee of US$175 million.
In addition to this, Pilbara Minerals has proposed a deed of company arrangement, under which it will now contribute A$6 million to a fund which is principally in support of the entitlements owing to Altura employees who have been made redundant. This follows the project being placed into care and maintenance to mitigate operational cash losses.
What now?
Management notes that the pathway to complete the acquisition requires an approval of the deed of company arrangement proposal at a meeting of creditors during December and the completion thereafter of a proposed A$240 million equity raising by Pilbara Minerals.
These final steps will enable the completion of the share sale agreement, at which point Pilbara Minerals would acquire the Pilgangoora Lithium Project on an unencumbered basis.
According to the release, the second creditors' meeting, where creditors will vote on the proposal, is expected to occur on or before 11 December. Pleasingly for Pilbara Minerals, the senior secured loan noteholders of Altura have agreed to vote in favour of it.
Once the proposal is approved, Pilbara Minerals will complete a A$119 million cornerstone placement to AustralianSuper and Resource Capital Fund. After which, it will launch a A$121 million accelerated non-renounceable entitlement offer, which is to be fully underwritten by Macquarie Group Ltd (ASX: MQG).
The company is unlikely to struggle to raise these funds, given that it has agreed to raise them at a fixed price of A$0.36 per share. While this was an 11.4% discount at the time of its first announcement at the end of October, a significant jump in the Pilbara Minerals share price means it is now a 50% discount to where its shares are trading today.
