For background -
TFS announcement 3/9/2009: http://asx.com.au/asxpdf/20090903/pdf/31kjkvtpvb7dv3.pdf
End of year results presentation 20/8/2009:
http://www.tfsltd.com.au/library/file/ASX%20Announcements/TFC%20-%20FINAL%2009%20FULL%20YEAR%20RESULTS.pdf
Message:
Interesting announcement from TFS...Two weeks ago they report a 44% increase in NPAT, maintainence of dividend and a trail of positives. A net debt position stated of 26 mil and quote “still low gearing ratio net debt / nebt debt + equity ratio of 16.5%”.
TFS is in due dilligence om 8000 ha of land in the Ord region. And looking at other land opportunities...But I would have thought they could have managed the purchase easily on their own.....so the reasons for the share placement is a bit of a mystery!
TFS notes in the placement announcement that the proceeds will be used to reduce net debt (which is low anyway) and maintain balance sheet flexibility to persue growth opportunities!
There is also going to be a share placement to existing share holders and the shares will participate in the end year dividend.
All a little strange at this point and no further details have been provided. Merril Lynch is to act as lead manager.
At this stage I see this as a positive announcement and there must be something brewing. Management however need to articulate whay the upcoming opportunity is given they are already looking for capital....
The question being then...is this for land acquisition (big demand by institutions for plantings), development of distilation plants, pan mouthwash / masala product and market development (A$15 bn anual market), increase share liquidy to get wider institutional investment involvement!
All very interesting and waiting with baited breath for chapter two of the releated announcement!
SD
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