Energy Fuels Inc. has closed a senior convertible notes issuance totalling $700mn, including the full exercise of the $100mn over-allotment option by initial purchasers. The offering, initially planned at a lower amount, was upsized in response to strong investor demand.
Optimised financial terms to attract the market
The notes, maturing in 2031, carry an annual interest rate of 0.75%, payable semi-annually. The initial conversion price is set at $20.34 per share, representing a 32.5% premium over the last reported share price on September 30. In parallel, Energy Fuels purchased “capped call” options for $53.55mn, raising the effective conversion price to $30.70, equal to a 100% premium.
This structure limits dilution upon conversion while allowing the company to settle the notes in shares, cash, or a combination of both. Energy Fuels also retains the right to redeem the notes under specific conditions.
Financial backing for rare earth and uranium development
The capital raised will support Energy Fuels’ rare earth development initiatives, notably the expansion of its White Mesa Mill in the United States and the Donald Project in Australia. The company also aims to strengthen its position in uranium, citing low-cost domestic production.
Energy Fuels Chief Executive Officer Mark Chalmers stated the transaction reflects “a vote of confidence” from investors in the company’s strategy. He highlighted the attractive annual coupon and the strengthened balance sheet enabling faster project execution.
Major financial institutions lead the offering
Goldman Sachs & Co. LLC served as sole book-running manager for the issuance. Cantor acted as lead manager and capped call coordinator, with Morgan Stanley also serving as a lead manager. BMO Capital Markets and Canaccord Genuity participated as co-managers.
Energy Fuels’ ability to secure this level of financing amid a cautious financial environment underlines rising market interest in strategic materials. The offering was sufficiently oversubscribed to justify a $67.5mn upsizing over the initial tranche.
