Bradken bolsters war chest

MINING consumables supplier Bradken is seeking to boost its coffers by a cool $A162 million to fund capital spending initiatives and for potential acquisitions and growth opportunities.
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Work continues apace at the Mt Thorley workshop near Singleton.

Staff Reporter

The company will undertake a fully underwritten institutional placement of around 18.7 million new ordinary shares.

The issue price of the shares will be determined by a bookbuild across $8.05-8.65 per share with the underwritten backstop price representing a 6.9% discount to the last sale.

In addition, a share purchase plan will be offered under which eligible shareholders may subscribe for shares up to a value of $10,000. The SPP, which is not underwritten, will be at the same price as the placement.

The company’s capital spending program for 2011-12 includes $100 million for spending on growth opportunities, including the Chinese Xuzhou foundry and the expansion of two major US manufacturing facilities, $20 million to help lower costs and $38 million for “stay in business” spending.

Meanwhile, Bradken says the outlook for mining products markets remains very strong in future years and believes its core business is well placed to capitalise on future growth opportunities.

Merrill Lynch International is acting as underwriter, sole lead manager and bookrunner on the placement.

Shares in Bradken were trading at $8.65 prior to entering a trading halt.