Mallesons Stephen Jaques and Blake Dawson have advised on Energy Resources Australia's (ERA) A$500 million 12-for-7 rights issue, priced at A$1.53 per share, down from close to A$28 per share in 2006 and at a 53.5 percent discount on its last closing price. Mallesons partners David Friedlander and Evie Bruce advised the underwriter and Blake Dawson partner Marie McDonald advised the issuer, ERA. Sullivan & Cromwell acted as U.S advisor to ERA.

The raising was called the most heavily discounted this year and reminiscent of a number of equity raisings by companies during 2009. Investors were told the A$1.53 per share represented a 29.8 percent discount on the energy company’s theoretical ex-rights price – the level shares should trade at taking into account a dilution effect on earnings following the raising.

The ERA equity raising is also the first raising to reach A$500 million since Leighton Holdings raised A$757 million in April. Investors were told proceeds from the deal would further construction and exploration at ERA’s Ranger project in the Northern Territory.

Interestingly, the structure used was not that recently used by Goodman Fielder, the PAITREO, which it is said works best for companies with a suitably large retail register. ERA chose an AREO – or Accelerated Renounceable Entitlement Offer.