Ramaco Resources drops after pricing $300 mln convertible debt offering

Ramaco Resources

05/11/2025 12:51

** Shares of Ramaco Resources METC.O down 10% before the bell to $23.88, a nearly two-month low, after capital raise

** Lexington, Kentucky-based METC early Weds announces pricing public offering of $300 mln 0% 6-yr convertible bonds (CBs)

** It intends to use net offering proceeds to fund development of its rare earth elements and critical minerals project in Wyoming, for strategic growth opportunities and general purposes

** Initial conversion price of $32.74 represents 35% premium to $24.25 public offering price of concurrent delta hedging transaction announced alongside the CBs offering

** METC also plans to use $28.5 mln to pay for capped call transactions, employed to mitigate potential dilution; initial cap price of $54.56 is 125% above the delta offering's price

** Goldman Sachs and Morgan Stanley are joint bookrunners for the CBs offering

** As of Oct 27, METC had ~55.2 mln and ~10.8 mln outstanding Class A and Class B shares, respectively, the filing shows

** METC shares on Tues ended down 4.6%, trimming YTD gain to 165%

** 6 of 7 analysts rate METC "strong buy" or "buy", 1 rates "hold", and their median PT is $43, according to LSEG data

(Lance Tupper is a Reuters market analyst. The views expressed are his own)

((lance.tupper@tr.com 1-646-279-6380))