Western Areas storms Panoramic Resources recap

ASX-listed Western Areas has sent a reminder that it's not just private equity tyre-kickers that can use recapitalisations to nab strategic positions.

Western Areas has committed to take up to a 19.9 per cent stake in listed rival Panoramic Resources via the company's $90 million equity raising.

Western Areas will spend as much as $29 million buying Panoramic shares, writing a cheque to take part in the institutional placement and as a sub-underwriter to the entitlement offer.

Western Areas' interest emerged as Panoramic kicked off its long-awaited recapitalisation raising via Canaccord Genuity and Morgans. The brokers also underwrote the deal.

The company was seeking to raise $90 million at 7¢ a share, which was a 41.7 per cent discount to the last close and a 21 per cent discount to the theoretical ex-rights price.

The raising was split into a $29 million placement and $61 million entitlement offer, which was non-renounceable and on a one-for-1.15 basis.

Funds raised were to repay debt, including major creditors Macquarie and Zeta, general working capital, and its Savannah North capital development.

Morgans, Cannacord and Hartleys were seeking bids into the placement and institutional entitlement offer on Monday morning.

Potential investors were told Zeta, which was Panoramic's biggest shareholder, would not participate in the placement, but would buy up to $10 million of new shares in the retail entitlement offer.

Panoramic shares last traded in April at 12¢ each.