Vancouver — A private equity fund has withdrawn its US$100-million rights offering for shares in
The sole U.S. producer of palladium and platinum had put the rights offering on the back burner while reaffirming its support for Norilsk’s offer to acquire a 51% stake of the company for US$100 million in cash and 877,000 oz. of palladium (T.N.M., Dec. 2-8/02).
The equity fund, run by an unidentified investment bank, first made the proposal in early April (T.N.M., May 5-8/03) and submitted a second proposal later that month. Stillwater rejected both.
Stillwater is “disappointed” by the firm’s withdrawal, as it wanted to “discuss the possibility of putting into place a financing alternative in the event the Norilsk Nickel transaction is not completed.”
Stillwater has been scrambling to raise cash after development of two Montana mines, East Boulder and Stillwater, boosted debt just as the price of palladium fell to 5-year lows.
Norilsk, the world’s largest producer of palladium, offered the much needed cash to Stillwater in November 2002, but the deal has yet to be approved by two federal agencies, including antitrust regulators. Shareholders vote on the deal on June 16.
Stillwater says its funding is adequate to meet its liquidity needs through 2003, “barring unexpected or extraordinary events.” However, there are no rival bidders, and so if the Norilsk deal does not close, Stillwater will face a credit squeeze.
Be the first to comment on "Stillwater rights offering falls through"