From net cash to net debt OZL has moved from a net cash position of A$317m at the end of 1H08 to a net debt position of~A$766m on our estimates.
This was cut from a research report i got from my broker.
They obviously have a different opinion in regards to the 1.2 bil that was there previously.
Brokers obviously can get it wrong but it would be more difficult for OZL to refinance the loan on favourable terms if they are currently in a net debt position. As that infers that century, capex spend and ramp up of PH is going through funds pretty quick (probably the reason why they are now minimising). With the outlook being pretty soft there is not too many catylsts to push commodities up and that could worry the banks.
On a personal note, i hold and think that OZL is a buy LT, facing some short term issues that will provide a good entry/top up level. I believe they will get the refinancing done but i do not believe it will be as easy as is being made out if the above is true.
OZL Price at posting:
$5.60 Sentiment: LT Buy Disclosure: Held