Merrill Lynch cuts their target price from 150c to 70c. NEUTRAL recommendation. Says they should successfully refinance their debt.
UBS say the update makes disconcerting reading and confirms worst fears. “Without debt refinancing, we believe OZL will have to resort to an equity raising or asset sales, neither of which in our view look appealing in the current market”. They have a NEUTRAL rating and a 65c target price.
Macquarie has an UNDERPERFORM recommendation and 50c target price. They say “while on our metals price forecasts OZL's assets offer greater value than is currently being reflected in its share price, confidence in debt and equity markets remains very low, and OZL's value proposition may well prove illusory in the event refinancing is unable to be negotiated.
Goldman Sachs JB Were says they offer long term value if they can renegotiate their debt but that “Should this not eventuate, we believe OZL would have to look at other options to raise cash, either via a dilutionary capital raising or through asset sales”.
Citigroup has a BUY recommendation and a 100c target price. They say debt issues are highly concerning and could prompt a capital raising and asset sales.
OZL Price at posting:
55.0¢ Sentiment: None Disclosure: Held
