Sigma Lithium Corporation has announced that funds and accounts managed by BlackRock (NYSE:BLK) will make an additional total investment in the company of approximately C$64.2 million, increasing the size of its previously announced non-brokered private placement of common shares to approximately C$136.7 million.
The company said it now intends to issue from treasury a total of approximately 11,634,137 common shares, up from the approximately 7,234,042 shares previously announced, still at C$11.75 per share. Previously, it targeted raising total funds of about C$85 million.
READ: Sigma Lithium kicks off production plant construction at its Grota do Cirilo project in Brazil
Sigma, which is dedicated to powering the next generation of electric vehicle batteries with environmentally sustainable and high-purity lithium, expects to use the net proceeds of the offering to fully-fund the construction of its phase 1 production plant and mine, further develop phases 2 and 3 of its wholly-owned Grota do Cirilo project in Brazil, and for general corporate purposes.
As part of the offering, Sigma said BlackRock (NYSE:BLK) has agreed to buy 4,372,766 shares for an aggregate subscription price of approximately C$51,380,000.
In a secondary transaction, the fund manager has also agreed to purchase 1,093,191 shares at the issue price from the largest shareholder of the company, A10 Investimentos Fundo de Investimento de Ações – Investimento No Exterior (the A10 Fund) for an aggregate purchase price to A10 Fund of C$12,844,994, representing 2.25% of A10 Fund's shares in Sigma Lithium.
Following completion of the offering and the secondary transaction, Sigma said the A10 Fund’s stake will reduce to about 47.7% from 55.3% on an undiluted basis, while BlackRock (NYSE:BLK)’s investment will give its funds a 5.5% stake.
“The A10 Fund's sale of common shares to BlackRock is being made based on a strategic discussion with the company and allows BlackRock to increase its shareholding interest in the company without further dilution to shareholders of the company,” Sigma explained in a statement.
Sigma said it has also agreed with A10 Serviços Especializados de Avaliação de Empresas Ltda (A10 Advisory) to provide services in respect of the offering. A10 Advisory will be entitled to finder's compensation for purchases by subscribers it introduces. Certain principals of the A10 Advisory are directors, officers or indirect significant shareholders of the company, it added.
The company said the offering and the secondary transaction are scheduled to close on or about December 22, 2021, in one or two tranches, and are subject to certain conditions, including the receipt of all necessary approvals, and the approval of the TSX Venture Exchange.
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