Molycorp, Inc. has announced the successful close of its previously announced $400 million financing arrangement with certain investment vehicles affiliated with Oaktree Capital Management, L.P. Under the arrangement, Oaktree will provide Molycorp and certain of the Company’s subsidiaries with up to $400 million in secured financing through credit facilities and the sale and leaseback of certain equipment at the Company’s Mountain Pass facility (the Financings).
$250 million of the Financings has now been funded, with the remaining $150 million available until April 30, 2016 if Molycorp achieves consolidated adjusted EBITDA of not less than $20.0 million per quarter for two consecutive fiscal quarters, and production volume at its Mountain Pass facility of at least 4,000 metric tons per quarter for two consecutive fiscal quarters.
The Financings are secured by certain Molycorp assets and certain assets of the Company’s subsidiaries, guaranteed by most of the Company’s subsidiaries, and will mature in five years, subject to certain springing maturity dates dependent on the Company’s repayment of certain outstanding debt, beginning on April 30, 2016.
In connection with the financings, Molycorp issued to Oaktree warrants to purchase up to an aggregate of 24,477,395 shares of the Company’s common stock. Warrants to purchase up to an aggregate of 18,358,019 shares of common stock have an exercise price of $0.01 per share, and warrants to purchase up to 6,119,340 shares of common stock have an exercise price of $2.04 per share.
Additional details of the Financings are included in the Company’s Current Report on Form 8-K filed today with the US Securities and Exchange Commission.