The Sandfire Resources Ltd (ASX: SFR) share price isn't going anywhere today as the company undergoes a $200 million capital raise.
The raised cash will go towards strengthening the S&P/ASX 200 Index (ASX: XJO) copper miner's balance sheet, paying down debt, and funding exploration activities.
The Sandfire share price last traded at $4.79.
Keep reading to find out more about the raise and how shareholders can get involved.
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Sandfire stock frozen amid $200m capital raise
The Sandfire share price is on ice on Friday as the company launches a $200 million entitlement offer.
It will see new shares in the copper miner on offer for $4.30 apiece – representing a 10.2% discount to its previous close. Investors will be able to subscribe to one new share for every 8.8 shares already held.
The offer will comprise an institutional component and a retail component. The stock will return to trade on news of the outcome of the former component – expected to raise $150 million.
Retail investors can get in on the action when the latter offer opens next Friday.
Of the cash raised, $50 million is earmarked to pay down debt. Another $90 million will go towards Sandfire's balance sheet. The final $60 million will help fund its growth and exploration projects.
The company expects to have a US$324 million pro-forma, unaudited net debt position following the raise. On announcing the offer, it told the ASX:
Sandfire has successfully transitioned itself into a significant, diversified, globally relevant multi-asset copper miner, delivering growth and sustainable copper production from its portfolio of international assets.
In addition to enhancing financial flexibility, the entitlement offer will provide additional working capital at Sandfire's existing operations, where the company is focused on continued operating results at MATSA and delivering the Motheo Copper Mine in Botswana, scheduled to begin production in the June [financial year 2023] quarter.
Sandfire share price snapshot
The Sandfire share price has suffered amid 2022's broader downturn.
The stock has dumped 29% since the start of the year. It's also 21% lower than it was this time last year.
For comparison, the ASX 200 has dumped 6% year to date and 3% over the last 12 months.
