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FVAC U - Fortress Value Acquisition News Story

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UPDATE 1-U.S. rare earths miner MP Materials to go public in $1.47 bln deal

Wed 15th July, 2020 4:06pm
(Adds details) By Ernest Scheyder July 15 (Reuters) - U.S. rare earths miner MP Materials said on Wednesday it would go public through a merger with a blank-check company backed by private equity firm Fortress Investment Group in a deal valued at $1.47 billion. The listing on the New York Stock Exchange would be the first for a U.S. rare earths company since Molycorp went public a decade ago. Molycorp filed for bankruptcy in 2015 and MP Materials bought Molycorp's assets, including California's Mountain Pass mine, out of bankruptcy in 2017. The deal comes amidst efforts to resume U.S. production and processing of rare earths, a group of 17 minerals used to build weapons and electronics. China is the world's largest producer. urn:newsml:reuters.com:*:nL1N28F2AS urn:newsml:reuters.com:*:nL5N2CA8MT Hedge funds JHL Capital Group and QVT Financial will fold their ownership of MP into the special-purpose acquisition company (SPAC) Fortress Value Acquisition Corp FVAC_u.N , shares of which gained as much as 20% in Wednesday morning trading. Fortress is controlled by Japan's SoftBank Group Corp 9984.T . SPACs have been behind some recent high-profile public listings, including electric car maker Fisker, which announced its plans earlier this week. urn:newsml:reuters.com:*:nL3N2EK2FX MP will net about $489 million from the deal and a separate stock offering. It plans to use the funds to upgrade outdated Molycorp-era processing equipment in California. MP ships more than 50,000 tonnes of concentrated rare earths per year to China for processing. Chinese customers account for all of its $100 million in annual revenue. urn:newsml:reuters.com:*:nL5N2CA8MT It was not immediately clear if China's Shenghe Resources Holding Co Ltd 600392.SS , which owns about 10% of MP, would participate in the Fortress deal. Shenghe and MP Materials did not immediately respond to requests for comment. Reuters reported earlier this year that Shenghe's stake in MP had prompted concern from U.S. government scientists. The Pentagon in April awarded funding to MP but put that decision on hold after the Reuters report and outcry from U.S. senators. urn:newsml:reuters.com:*:nL1N2D40VA urn:newsml:reuters.com:*:nL5N2CA8MT <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ FACTBOX-Rare earths projects under development in U.S. urn:newsml:reuters.com:*:nL1N2C6097 EXCLUSIVE-U.S. Army will fund rare earths plant for weapons development urn:newsml:reuters.com:*:nL1N28F2AS INSIGHT-American quandary: How to secure weapons-grade minerals without China urn:newsml:reuters.com:*:nL5N2CA8MT ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Ernest Scheyder; Editing by Lisa Shumaker) ((ernest.scheyder@thomsonreuters.com; Twitter: @ErnestScheyder; +1-713-210-8512; Reuters Messaging: ernest.scheyder.thomsonreuters.com@reuters.net))
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