Almonty Industries plans $700 million convertible notes offering

Almonty Industries Inc. (NASDAQ: ALM) announced plans to offer $700 million in convertible senior notes due 2031 in a private placement to qualified institutional buyers. The tungsten mining company also expects to grant initial purchasers an option to buy an additional $100 million in notes.

The notes will be senior, unsecured obligations that mature July 1, 2031, unless converted, redeemed or repurchased earlier. Interest will be paid semi-annually. Noteholders may convert their notes under certain circumstances, with Almonty able to settle conversions through common shares, cash, or a combination of both.

Starting July 1, 2029, Almonty may redeem the notes if its stock price exceeds 130% of the conversion price for a specified period and other conditions are met. The company must offer to repurchase notes for cash if certain fundamental corporate changes occur.

Almonty plans to use proceeds to fund capped call transactions and refinance existing debt. The remaining funds will support working capital, general corporate purposes and potential acquisitions. The capped call transactions aim to reduce potential share dilution from note conversions.

In connection with the capped call transactions, option counterparties may purchase Almonty shares or enter derivative transactions, which could affect the stock price and notes' convertibility. Such activity may continue throughout the notes' term.

The offering requires regulatory approvals, including acceptance by the Toronto Stock Exchange. The notes and any shares issued upon conversion will not be registered under the Securities Act.

Almonty operates tungsten mines in Portugal and is developing the Sangdong Mine in South Korea. The company describes itself as a supplier of conflict-free tungsten for defense and technology applications.

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