The Company intends to use the net proceeds received from the Notes Offering and the Primary Shares Offering to fund operating expenses, working capital, capital expenditures and any other cash requirements for the remainder of 2012 and 2013, including without limitation, capital expenditures at its Mountain Pass facility and other capital projects, as well as other cash requirements, such as cash payments in August 2012 to certain holders of the 5% subordinated unsecured convertible debentures of Molycorp Canada, the Company’s wholly-owned Canadian subsidiary.
Concurrently with the Notes Offering and the Primary Shares Offering, the Company has entered into a share lending agreement with Morgan Stanley Capital Services LLC (“MSCS”), an affiliate of Morgan Stanley, under which it has agreed to loan to MSCS up to 13,800,000 shares of Common Stock (the “Borrowed Shares”), of which 7,500,000 shares of Common Stock were offered through Morgan Stanley at a price per share of $10.00 (the “Borrowed Shares Offering”) in a registered public offering. The Company has entered into the share lending agreement to facilitate the Notes Offering. The Company will not receive any proceeds from the Borrowed Shares Offering, but the Company will receive a nominal lending fee from MSCS for the use of the Borrowed Shares, which the Company intends to use for general corporate purposes.
Morgan Stanley and Credit Suisse Securities (USA) LLC are acting as joint bookrunners for the Notes Offering, and Morgan Stanley is acting as sole bookrunner for each of the Primary Shares Offering and the Borrowed Shares Offering.
Each of the Notes Offering, the Primary Shares Offering and the Borrowed Shares Offering may be made only by means of a prospectus supplement and an accompanying prospectus. Copies of the prospectus supplement and the accompanying prospectus relating to the Notes offering may be obtained from Morgan Stanley & Co. LLC, Attention: Prospectus Department, 180 Varick Street, Second Floor, New York, NY 10014 (email address: email@example.com) or Credit Suisse Securities (USA) LLC, Attention: Prospectus Department, One Madison Avenue, New York, New York 10010, e-mail: firstname.lastname@example.org or toll free at (800) 221-1037 and copies of the prospectus supplement and the accompanying prospectus relating to the Primary Shares Offering and the Borrowed Shares Offering may be obtained from Morgan Stanley & Co. LLC, Attention: Prospectus Department, 180 Varick Street, Second Floor, New York, NY 10014 (email address: email@example.com).This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the Notes, the Common Stock or any other securities, nor will there be any sale of the Notes, the Common Stock or any other securities in any state or jurisdiction in which such an offer, solicitation or sale is not permitted.
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