Check out Citibanks latest analysis of PDN following the equity rasing...
"Paladin Energy Ltd (PDN.AX)
Pre-emptive raising adds $68m to balance sheet
? Market speculations answered with A$68m raising — Paladin has raised A$68m via a placement of 57m shares at A$1.20/share. The placement is at an 8% discount to
the previous close of A$1.31 and represents 7% of issued capital. Suggestions of a capital raising to support the 2013 bonds have plagued Paladin’s share price for
several weeks and we view the current action as a pre-emptive rather than emergency move.
? Cash balance up — cash at 30 June 11 was US$118m and A$127m has been drawn from a new debt facility. Prima facie, the placement brings the total cash balance to
~US$310m or 30% cash backing. A process to of partial asset sales is underway and thus there is potential to further bolster the balance sheet.
? …but cash continues to flow out — we estimate expenditure since 30 June comprises ~US$30m in interest payments, US$25m in debt repayments and US$10m
for Kayelekera, which reduces the notional cash balance to US$245m. If Kayelekera continues to underperform, management’s assertions that the company will be cash
flow positive from CY12 will soon begin to look very shaky.
? Sticking to its guns — in our view, PDN has a window of ~6 months to deliver on the promises of the FY11 results conference call, which include a 10% cut in costs and
both mines reaching nameplate by early 2012. Production guidance for FY12 remains 7.4-7.9Mlbs despite problems at Kayelekera and our unchanged forecast sits below the
range at a cautious 7Mlbs. We expect the Sept Q to be weak and have lowered our profit forecast from US$27m to US$19m but anticipate an improved Dec Q.
? Valuation — we have lowered our target price to A$3.00 and EPS as a result of
dilution from the equity raising and trimming FY12 profit on the back of anticipated Sept
Q weakness from Kayelekera. In our view, the share price is discounting all growth
projects and inventory and is trading well below our bare bones valuation of A$1.74.
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Last
$11.91 |
Change
0.250(2.14%) |
Mkt cap ! $3.577B |
Open | High | Low | Value | Volume |
$12.00 | $12.14 | $11.73 | $17.31M | 1.457M |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
9 | 2836 | $11.91 |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
$11.92 | 4192 | 20 |
View Market Depth
No. | Vol. | Price($) |
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8 | 1097 | 11.910 |
11 | 4119 | 11.900 |
12 | 6086 | 11.890 |
8 | 3845 | 11.880 |
10 | 5916 | 11.870 |
Price($) | Vol. | No. |
---|---|---|
11.920 | 2504 | 13 |
11.930 | 5501 | 18 |
11.940 | 6022 | 18 |
11.950 | 3732 | 14 |
11.960 | 5658 | 12 |
Last trade - 15.22pm 07/10/2024 (20 minute delay) ? |
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