The Pilbara Minerals Ltd (ASX: PLS) share price has returned from its trading halt on Wednesday and crashed lower.
In early trade the lithium miner's shares were down as much as 17% to 72.5 cents.
The Pilbara Minerals share price has recovered slightly since then but is still down 13.5% to 75.7 cents at the time of writing.
Why is the Pilbara Minerals share price crashing lower?
The company's shares have come under pressure today after it completed the institutional component of its equity raising.
According to the release, the company has raised a total of $61 million via an underwritten 1 for 7.6 pro-rata accelerated non-renounceable entitlement offer. These funds were raised at 36 cents per new share, which represents a massive 59% discount to its last close price.
This means the company has now raised a total of $180 million, following its previously completed $119 million cornerstone placement with AustralianSuper at the same price.
Pilbara Minerals will now push ahead with its retail entitlement offer, which is aiming to raise a further $60 million. This will bring its overall equity funding package to $240 million.
Why is Pilbara Minerals raising funds?
The proceeds from the equity raising will be used to fund the acquisition of the shares in Altura Lithium Operations for US$175 million. This is the company that owns Altura's Pilgangoora Lithium Project in Western Australia.
Pilbara Minerals' Managing Director, Ken Brinsden, commented: "We are very pleased with the extremely strong support for the Entitlement Offer shown from our institutional shareholders. This represents a clear endorsement of Pilbara Minerals' highly strategic acquisition of the neighbouring Altura Project on an unencumbered basis."
"The acquisition is expected to deliver significant benefits to Pilbara Minerals shareholders, including realisation of tangible operational synergies and consolidates our leading position in the Australian lithium market," he concluded.
