CHICAGO - Rare earth company Molycorp Inc. [MCP] continued to trade below its offering price Friday after a first day of trading on the New York Stock Exchange that saw the price of its shares fall 8.2%to $12.85 from an initial public offering at $14.
The Greenwood Village, Colo., company is the parent of Molycorp Minerals LLC, a rare earth producer and technology company, and is planning to use the net proceeds from the offering primarily to fund a portion of the modernization and expansion of its Mountain Pass, Calif., rare earth mining and production facility.
The company had said earlier in July that it plan to sell 28 million shares for $15-$17 per share. In midday trading Friday the stock was down another 3.4% to $12.41 per share.
The company plans to spend about $511 million through 2012 to restart mining operations at the Mojave Desert mine and has estimated it will produce 19,050 tonnes of rare earth oxides per year after upgrading equipment and ramping up output.
Morgan Stanley & Co. Incorporated and J.P. Morgan Securities Inc. are acting as joint book-running managers for the offering which is expected to close on Tuesday . CIBC World Markets Corp., Credit Suisse Securities (USA) LLC; Stifel, Nicolaus & Co. Inc.; Dahlman Rose & Co. LLC; Piper Jaffray & Co.; Knight Capital Markets LLC; Houlihan, Lokey, Howard & Zukin Capital Inc. and GMP Securities L.P. are acting as co-managers for the offering.
