15 October 2012
Watson, Farley & Williams (“WFW”), a leading international law firm, has advised Great Western Minerals Group Ltd. (“GWMG”) on a US$90 million secured bond issuance and the listing of those bonds on the Professional Securities Market of the London Stock Exchange plc (the “PSM”).
WFW advised GWMG on the initial offering when the bonds were placed by GMP Securities L.P., ISM Capital LLP, and Byron Capital Markets Ltd, and issued in April 2012. The bonds were subsequently listed on the PSM on 3 October 2012. This is the first time that convertible bonds from a TSX-Venture Exchange-quoted issuer have listed on the PSM, and the first in some years by a company whose shares are not listed on a UK market.
GWMG is an integrated rare earth processor whose speciality alloys are used in the magnet, battery, defence and aerospace industries. These alloys contain aluminium, nickel, cobalt and rare earth elements, and are produced at GWMG’s wholly owned subsidiaries, Less Common Metals Limited in the UK and Great Western Technologies Inc. in Michigan, USA.
The proceeds will primarily be used to finance the development of GWMG’s rare earth project in South Africa and to fund equipment and expansion of the company’s UK processing subsidiary, Less Common Metals.
Chris Kilburn, London corporate partner, WFW commented: “With traditional financing sources contracting, mining companies have had to become more creative in seeking alternative financing solutions. This transaction was particularly interesting as Great Western Minerals Group successfully raised funds representing almost half of its market cap through convertible bonds. Being the first transaction of its kind meant there were certainly complexities involved, but it will be interesting to see if more TSX-V, and other overseas listed companies, consider the convertible debt markets in the UK as a means of raising finance.”
The team was led by London corporate partner Chris Kilburn with assistance from corporate associate Tanvir Dhanoa and support from Projects Commodities & Export Finance partners Michael Kenny and Daisy East.