Leading global mining and smelting company Nyrstar said yesterday that it intends to raise €600m (£474m) as part of a strategic financing plan, as it looks to pay down debt and invest in improving infrastructure including smelting facilities.
The €600m raised will be divided between a €350m senior unsecured note offer to institutional investors, and a €250m rights issue, with preferential rights for existing shareholders.
Nearly half the money raised will be used by Nyrstar, which has a strong focus on zinc, to invest in upgrading its infrastructure around the world, including a €68m redevelopment of its Port Pirie smelter in Australia, to convert it into an advanced refining facility.
Nyrstar also said it would use money to launch a tender to buy back debt due in the next couple of years.
Shares in Nyrstar shot up over eight per cent yesterday on news of the financing strategy, as chief executive Roland Junck said the plan would “significantly enhance Nyrstar’s financial position and flexibility.”
Analysts at Citi said: “The rights issue should not be a surprise to the market. We believe this programme, if successful, should provide strong relief to the stretched balance sheet and investors will take comfort from early addressing the full 2015 bond maturity and part of 2016 bond maturity."
Nyrstar, which is headquartered in Switzerland but listed in Belgium, has around 6,500 employees across five continents, but has seen its value hit by low commodity prices in recent years.