what do the big instos have to say, page-5

target prices all up...or level
55c
$1.35
65c
$1

What the brokers say:

JP Morgan downgrade to UNDERWEIGHT from Neutral and cut target to 55c from 75c on concerns about the company being able to extend refinance until 31 January 2009. Also cites less cash, OZL pursuing options to divest its Martable gold project in Indonesia and that the completion of its refinancing facilities by 29 December is “highly unlikely.” “In our opinion, near term risks to OZL warrant downgrading our recommendation to Underweight. We can not recommend investing or holding stock in OZL at this time… Key risks to our price target include movements in base and precious metals prices, and the company’s ability to re-finance debt.”


GSJBWere keep HOLD and 135c target. See deteriorating cash as a major concern. Says that a default in on debt facility may trigger a default in the other facilities and the company’s convertible bonds. See OZL’s options as having to raise significant capital via the market or sell assets. Will keep the HOLD recommendation while the company remains in a trading halt and until it releases further information.


UBS keep NEUTRAL and 65c target. Says potential assets sales are very possible and that its cash position is a worry. Worried also about a cascade triggering of debt facilities. Says asset sales wouldn’t necessarily solve the problem for potential debt refinancing, especially if they are a forced seller. “The update highlights that it has received approaches from outside parties in relation to acquiring Martabe and for JV arrangements at Prominent Hill. The cash position has reduced to A$279m, down $125.6m in 10 days, due to ongoing cash burn at operations and provisional pricing adjustments. On the debt issues, the company states that one potential lender has withdrawn from discussion and that refinancing is unlikely to be finalised before 29 December. Also, a lender is claiming default under the terms of one of the debt facilities.”

Citigroup keep BUY and target of 100c. Said balance sheet is deteriorating and that cash levels fell $126m to $279m to in less than a week due to falling commodity prices, provisional pricing impacts and staff redundancies. Net debt up to $802m. Say refinancing options look poor. Said assets sales are looking the best option with a number of parties showing interest.