The Nickel Industries Ltd (ASX: NIC) share price is flying out of the gates on Friday.
In morning trade, the nickel producer's shares were up as much as 11.5% to 96.5 cents.
The ASX 200 mining share has pulled back a touch since then but remains up 8% at the time of writing.
Why is this ASX 200 mining share racing higher?
Interestingly, this gain has been driven by the company announcing a capital raising.
Usually, a capital raising would weigh heavily on a share price, but that's not the case for this ASX 200 mining share today.
That's because the company has been able to raise the funds at a significant premium to where its shares were last trading.
According to the release, a conditional 19.99% placement to PT United Tractors has been agreed, which will raise proceeds of A$943 million (US$628 million) at $1.10 per new share. This represents a 27.2% premium to its last close price.
In addition, the two parties have executed a collaboration agreement covering a conditional 20% direct investment in the ENC Project, as well as potential future Indonesian nickel mining and processing initiatives.
The release notes that PT United Tractors is one of the largest heavy equipment distributors and mine operators in Indonesia. Importantly, it has deep knowledge of the Indonesian mining landscape.
Nickel Industries' managing director, Justin Werner, said:
We are delighted to welcome DTN [a subsidiary] and the wider UT Group as a strategic shareholder of the Company. We believe that benefits of collaboration with UT are significant for Nickel Industries and will enable us to partner with a large and influential Indonesian mining company to jointly pursue growth opportunities in Indonesian Nickel, of which we believe there are many.
UT with its significant mining, power and infrastructure development and operating experience in Indonesia, substantial financial resources, and long-term return focus, will add substantial value to us in helping to achieve the Board's vision to build Nickel Industries into the leading global diversified nickel company.
