Investment bank Macquarie Group (MQG) is expected to present a proposal to the board of mining company OZ Minerals (OZL) today, which would see Macquarie underwrite a placement and rights issue that could inject up to A$1.4 billion into the miner. The proposal would replace the US$1.2 billion asset sale to China Minmetals which the board of OZ has already agreed to, however, the sale must still receive investor approval at tomorrow's annual general meeting. OZ chairman Barray Cusack said Macquarie's proposal is "not sufficiently compelling."
- Extract from First Prudential Markets- I believe a rights issue would be a win for everyone, especially if it included retail holders. The board needs to get to work and negotiate with the banks. Market conditions have improve 10 fold since the offer was made. A refinancing deal as well as a SPP would solve the issue. MQG seem keen to underwrite, and I would imagine that they would be keen to be a key player in refinanciing. Even if it was at higher than market rates, the way OZL is churning cash out at the moment, it could be payed off within 5 years, given no substantial dividend or dividend at all. Hope everyone votes No for the sale.
OZL Price at posting:
$9.10 Sentiment: LT Buy Disclosure: Held
