The only manufacturer of rare earth minerals of the western hemisphere, Molycorp, was in the middle of a $1 billion capital expenditure in its effort to become a vertically integrated provider of metals, oxides, and rare earth minerals.
Molycorp Financing the Production of Rare Earth Minerals (A) Case Study Solution
Yet it had just reported lower than forecasted sales and earnings for the second quarter of 2012. In correspondence to the announcement, its stock price fell 29% (its stock price had fallen from $77 to $11 in the previous 18 months). The weakening fiscal performance was due in large part to falling prices for rare earth minerals.
With less internally-generated cash flow available to finance the endeavor, management had to decide: how much capital, when to raise it, and to raise, what sort to raise. These decisions would establish its capability to implement its business strategy, as well as its capital structure, at least in the short term.
PUBLICATION DATE: June 18, 2014 PRODUCT #: 214054-HCB-ENG
This is just an excerpt. This case is about FINANCE & ACCOUNTING
