bhp broken china to fall bhp should hit $20 , page-42

Plucker, that sounds plausible too --Xstrata is offering a 2 for 1 capital raising issue at a massive discount to its close:
--------------------------------


LONDON (Reuters) - Mining group Xstrata Plc, whose shares have been hit by worries about its debt, said it plans to raise about $5.9 billion through a heavily-discounted two-for-one rights issue of new stock.

Xstrata, the world's fifth-biggest diversified mining group by market value, said in a statement on Thursday it would issue 1.96 billion new shares at 2.10 pounds a share.

The issue price represents a discount of 66 percent to the Xstrata's closing price of 6.23 pounds on Wednesday. The rights issue is fully underwritten by investment banks Deutsche Bank and JP Morgan.

Following the fund raising, its net debt would fall to around $12.6 billion, with gearing less than 30 percent, it added.

"Xstrata's absolute level of debt is now perceived as a potential constraint on the group, given the uncertainty that exists over the near-term outlook for commodities," Chief Executive Mick Davis said.

"Our announcement ... will provide a significant injection of capital, mitigate the risks presented by the current uncertainty and remove this potential constraint."

The group said it was also taking other measures in the face of the global downturn, including improved working capital management, which released about $1 billion in cash in the second half of last year, and cutting capital spending by $3 billion for 2009.

The rights issue, besides paying down debt, would allow Xstrata to buy the Prodeco thermal coal assets from its biggest shareholder, Glencore, for $2 billion, it added. Continued...

http://uk.reuters.com/article/companyNews/idUKTRE50S16L20090129