Hochschild Mining plc is to raise £64.8 million (net £61.1 million), through a rights issue, which it will use to strengthen its balance sheet by applying at least 50% to repaying debt. As at 30 June 2015, the company had short term debt of US$97.1 million and long term debt outstanding of US$442.9 million (US$343.3 million of which was in the form 7.75% Senior Unsecured Notes). At the same date cash on the balance sheet was US$84.3 million.
The company intends to issue 137.9 million new shares in the ratio three new shares for every eight existing shares, at GBp47/share, which represents a discount of 48% to the closing share price yesterday. The company currently has 367.7 million shares issued.
The rights issue is fully underwritten by J.P. Morgan Cazenove, BofA Merrill Lynch and RBC Capital Markets.
In the nine months to end September, the company produced 16.3 Moz of silver equivalent (AgEq), with a target for the year of 24.0 Moz AgEq.
Hochschild rights issue to reduce debt: HOC