Nickel Industries share price slips on $225 million debt capital raise

The Nickel Industries Ltd (ASX: NIC) share price closed lower on Monday amid a significant debt announcement by the mineral exploration company.

Nickel Industries shares finished the day down 1.82% at $1.08 each after hitting an intraday low of $1.052 a share. They opened this morning at $1.10 each.

Let’s check what announcement the company made today.

What happened?

Nickel Industries announced it had raised US$225 million in debt capital for the Oracle Nickel Project acquisition.

The company said it had executed binding agreements for the issuing of USD $225 million worth of senior secured notes. The debt has an interest rate of 10% and will mature in August 2025.

The notes will be issued on the Frankfurt Open Market Exchange.

Part of the proceeds from the notes, along with the company’s cash reserves and future earnings from its existing operations, will be used to satisfy the company’s remaining payment obligations for the project in Indonesia. The agreement was announced in November 2021.

Nickel Industries entered a memorandum of understanding with Shanghai Decent Investment Group Co Ltd to acquire a 70% stake of the Oracle Nickel Project. It’s estimated the project will have a production capacity of 36,000 tonnes of nickel when it’s completed.

When the production of its Angel Nickel and Oracle Nickle production facilities are consolidated, the company expects a nameplate capacity of more than 100,000 tonnes of the base metal.

The Oracle Nickel Project comprises four rotary kiln electric furnaces.

The first rotary line is due to be commissioned in October this year, five months ahead of the scheduled project delivery date, the company said.

Production facilities are situated in Indonesia Morowali Industrial Park, and Halmahera Island, Indonesia. 

Nickel Industries share price snapshot

The Nickel Industries share price slipped 1.37% in a year but has shed almost 25% year to date.

Its 2022 performance is well below that of the benchmark S&P/ ASX 200 Index (ASX: XJO) which has lost 5.7% so far this year.

This coincides with a steady downturn in nickel prices on commodity markets since March this year.

At the company’s current share price, Nickel Industries has a market capitalisation of around $2.9 billion. 

The post Nickel Industries share price slips on $225 million debt capital raise appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Monday
• Now’s the time to play defense if you have retirement on the horizon
• 4 key traits Warren Buffett uses to pick the best stocks
• Why is the Paradigm Biopharmaceuticals share price up 12% on Monday?

Motley Fool contributor Matthew Farley has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/EAScalr