Everyone on Hotcopper seems to be assuming that SDL is conducting a capital raising by raising new funds from equity investors. This may prove to be the case however I believe there may be a different way of looking at this. The reason is that the trading halt request talks about 'capital raising' and not 'a capital raising'. I know this may seem like the same thing but I think not. We all know that SDL needs ~$4.6bn to get this project out of the ground. Every cent of this $4.6bn is capital, albeit split between equity capital and debt capital. My point being that capital comes in many forms and we need to be mindful of this fact before jumping to the most basic conclusion. It is therefore my view that the announcement may include an equity raising, a debt raising or a combination of both. If it is not simply an on market raising as many suggest then the news may in fact be quite positive as we may be closer to having the project fully financed.
SDL Price at posting:
43.5¢ Sentiment: LT Buy Disclosure: Held
