Replies to post #1098 on Molycorp.Inc. (fka MCPIQ)

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It has everything to do with the offering and the reason for the offering

Molycorp Unveils $200 Million Share, $100 Million Note Offerings;

By Saabira Chaudhuri

Molycorp Inc. (MCP) has unveiled a $200 million stock offering and a $100 million note offering as the company aims to raise proceeds to fund current capital needs, including expenditures at its Mountain Pass, Calif., rare-earth manufacturing complex.
Shares sank 8.7% to $8.06 in recent premarket trading. Through Tuesday's close, the stock has dropped 69% in the past 12 months.
The company has a market capitalization value of about $1.22 billion according to FactSet.
Observers have been hoping Molycorp will provide more details about cash requirements--in particular for the first half of 2013--and contracts linked to the company's roughly $1.25 billion modernization and expansion project at its Mountain Pass facility.
Costs tied to the project have run above Molycorp's targets, which led the company in August to raise capital. Though Molycorp ended the third quarter with $436 million in cash, some worry more capital will be needed as weak rare-earth prices weigh on operating cash flow.
The note offering pertains to convertible senior notes due in 2018.
Molycorp said it will also lend up to $40 million of its common stock to Morgan Stanley Capital Services LLC, and will receive a nominal lending fee that it will use for general corporate purposes. Under the lending agreement, Morgan Stanley will offer the shares in a public offering. Molycorp, which noted it entered into the share lending agreement to facilitate the note offering, won't receive any proceeds from the borrower shares offering.
Last month, Molycorp's board ousted President and Chief Executive Mark Smith, who led the company for more than five years, and named Constantine Karayannopoulos interim president and CEO. Mr. Karayannopoulos previously led Neo Material, a company Molycorp bought in June.
And earlier this month, Molycorp warned its 2013 revenue would fall short of expectations due to currently weak rare-earth prices and the increased production at the Mountain Pass complex.

Write to Saabira Chaudhuri at [e-mail]

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January 23, 2013 07:38 ET (12:38 GMT)
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