Mining rich-listers Tim Goyder and Gina Rinehart take $750m hit as Liontown shares tumble
Gina Rinehart and Tim Goyder’s investments in lithium hopeful Liontown Resources have taken a massive hit following a failed takeover bid by US giant Albemarle.
Mining billionaires Gina Rinehart and Tim Goyder have taken a $750m hit to their investments in lithium group Liontown Resources after a failed takeover bid and a discounted equity raising sent its shares plummeting.
Liontown shares entered a trading halt after a $6.6bn takeover bid by US-based lithium giant Albemarle failed to eventuate due to an intervention by Mrs Rinehart’s Hancock Prospecting which has amassed a 19.9 per cent stake.
Her intentions for the group are unclear at this stage, but she has previously ruled out full ownership.
Shares in the Perth-based company slumped 31.9 per cent, or 89c, to close at $1.90 having earlier in the day plunged as low as $1.82 after a trading suspension was lifted on Friday.
Liontown shares entered a trading halt after a $6.6bn takeover bid by US-based lithium giant Albemarle failed to eventuate due to an intervention by mining billionaire Gina Rinehart, who has amassed a 19.9 per cent stake. Her intentions for the group are unclear at this stage, but she has previously ruled out full ownership.
Mr Goyder, who chairs Liontown and is one of its biggest shareholders, holds more than 329.7 million shares in the company.
Mr Goyder is also cousin of Qantas chairman Richard Goyder.
Liontown had scrambled to finalise a $1.2bn funding package and equity raising for its flagship Kathleen Valley project in WA after the offer from Albemarle was withdrawn.
Liontown announced on Thursday that it had finalised $760m in debt funding from banks and government credit agencies, including Export Finance Australia.
It also had raised equity of $365m in a fully underwritten institutional placement at $1.80 a share. In addition, it made a non-underwritten placement to Mr Goyder for 6 million shares at the same price to raise $10.8m.
Earlier on Friday, chief executive Tony Ottaviano said “notwithstanding current challenging market conditions”, the group’s $365m institutional funding was met with strong demand.
He said completion of the discounted institutional placement secures funding to take its flagship Kathleen Valley project in WA through to first production and beyond, he said.
“We have achieved our goal of strengthening our share register with the addition of high-quality domestic and international institutional shareholders.”
The raising price was a 40 per cent discount to Liontown’s pre-halt trading price of $2.79.
Mrs Rinehart’s Hancock said earlier this month that it had paid no more than $3 a share for its 438m shares.
That stake, worth $1.26bn a week ago when the shares were trading at $2.88, had taken a $430m haircut and fallen to $832m on Friday. At the same time, Mr Goyder’s stake fell from $949m to $626m.
Liontown chief executive Tony Ottaviano said he expected Ms Rinehart would want to maintain her stake in the company. He said the firm was on track to ship its first load of lithium next year with offtake agreements with Tesla, Ford and LG.
“We remain confident in our ability to execute the plan for Kathleen Valley on schedule and on budget, and as part of our financing strategy we have ensured an appropriate financial buffer is in place to allow the company to successfully weather any unforeseen issues that may arise,” said Mr Ottaviano.
Liontown said lithium demand continued to be driven predominantly by demand from electric vehicles. Despite supply chain disruptions, macro-economic, geopolitical uncertainty, and high commodity and energy prices, electric car sales saw another record year in 2022.
During 2022, the share of electric cars in total car sales was 14 per cent, an increase from nine per cent in 2021 and less than five per cent in 2020
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