Posts Tagged ‘capital raising’

NSW Power Privatisation – Winners and Losers

Wednesday, December 15th, 2010

The New South Wales government has undertaken a 2-year process to address its energy reform strategy. Part one of its power privatisation, involving the exiting of electricity retailing by the government, was completed late last night, with confirmation the $5.3 billion deal had been awarded to a consortium including Origin Energy and Hong Kong-based TRUenergy. The deal means the consortium will take over the three state-owned electricity retailers and the trading rights to power from two stations.

There are a number of winners and losers as a result of this deal.

The Losers

* AGL shareholders who suffered a slump in their shareholder value, after it was reported that AGL lost the deal.
* AGL corporation, as it loses its dominance in the retail energy supply business. AGL is now only the third-largest company in the retail electricity arena with a 10 percent market share.
* The energy company directors who resigned en masse. Eleven resignations came from the boards of power generators Delta and Eraring, who had concerns about their responsibilities resulting from the deal.
* NSW electricity consumers, who potentially face higher electricity prices, though the NSW government says there will be a more competitive electricity market.
* Origin has been put on negative debt watch by the Standard and Poor’s ratings agency, due the funds it will have to raise to fund the deal.
* NSW taxpayers lose out if the NSW Greens are correct in arguing the government could have raised more money on the deal. The opposition said that the deal bid represents only half of the true value of the assets.

The Winners

* The New South Wales Labor government, in finally realising the deal with the approval from the ACCC.
* Origin, because through the deal it becomes the largest retail energy supplier in the country.
* The Hong-Kong based TRUenergy gets access to the Australian power supply sector.
* TRUenergy and Origin through the deal will emerge with a combined 85 percent of the state’s power market.

Our View

Investors need to get on the shareholder register to be eligible to participate in any capital raising(s) that are likely to result from this deal. Monitor the rhetoric that will no doubt unfold near-term in the lead-up to the next state elections, due in March next year.

Post to Twitter

Tags: , , , , , , , ,
Posted in ASX Company News, Stock Market Analysis | No Comments

Unique IPO Opportunity!

Wednesday, August 11th, 2010

MDS Financial Services acts as Lead Manager for Allmine IPO

Our parent company MDS Financial Services Pty Ltd specialises in IPOs and capital raisings for ASX listed and emerging companies and is pleased to act as lead manager for the Allmine IPO.

Unique IPO Opportunity

Allmine Group is a mobile mining plant services company with a unique ‘one stop shop’ service proposition that provides plant owners with a 100% plant maintenance solution.

Having increased revenues from $2.7 million to over $27 million within a 3 year timeframe, Allmine is now embarking on a $10 million IPO to further support this growth through organic expansion and bolt on acquisitions.

The Allmine Group has built a strategic service footprint of workshops and mobile service units across Western Australia and the Northern Territory with particular focus on the Pilbara iron ore, and uranium sectors.

Interested? Read more about the Allmine IPO and download a prospectus at www.mdsfinancial.com.au/allmine

Post to Twitter

Tags: , , , , , , ,
Posted in Trader Dealer News | No Comments

Analysts Eye

Friday, March 12th, 2010

Plenty to Smile About

Investors have plenty to smile about as the reporting season winds down.

This week was the anniversary of the market turnaround from the worst destruction of shareholder wealth in living memory. In Australia we have seen our market up 55% on the ASX200 from its March lows. Overseas market turnarounds have been even more impressive with the Unites States seeing the S&P 500 up 70% and the NASDAQ up a staggering 75% while in the UK and Europe, markets are up around 60%. China has seen its market recover over 80% from its market lows.

The recent reporting season has given us pause for thought, with 7% of companies outperforming, 8% underperforming forecasts and the remaining 85% reporting inline (according to Credit Suisse). One key measure of corporate performance is the debt to equity ratio (D/E) and this has seen an impressive turnaround with the market average now 23% compared to over 30% in the previous corresponding period.

A raft of capital raisings to the tune of $100 billion in the past year has offered support to corporate balance sheets; however this has come at the cost of the dilution of shareholder equity. Earnings have fallen 13.7% due to this dilution (according to Macquarie). Corporates have been keen to hold on to cash, as evidenced by dividend payouts falling around 6% (according to JBWere) however this is a significant turnaround from the previous corresponding period where there were cuts to dividends of 22%.

It pays to be vigilant during the reporting season as traders can attest in the recent company performances. Those stocks that reported outperformance have in turn outperformed the share market benchmark by around 8.5% and on the flip side the underperformers have underperformed the index by 8.4%.

A quick synopsis of the results saw:

- Big four banks – upside surprise with the bad debt provisions falling more than expected, the sector is still a key driver for performance on the ASX.

- Insurers – were a mixed bag. Generally margins improved significantly, but Suncorps banking arm disappointed and QBE missed forecasts.

- Miners – profits were hit by a rising Aussie dollar and falling commodity prices over the reporting period. However the focus is still firmly on the strong Chinese and Indian demand which continues to underpin the outperformance of the materials sector in the ASX. Capital expenditure (Capex) will remain subdued for the remainder of the year, as miners still focus on cost cutting.

- Misses – those that disappointed saw their share price punished as was evidenced by: Gunns (GNS), Toll (TOL), Worley (WOR) and QBE.

What Now?

Brokers estimate in the 2010 forecast that earnings will rise for 6% and looking into the crystal ball, earnings are forecast to continue to rise in subsequent years, 27% in 2011 and 15% in 2012. If these forecasts hold true then they will underpin continuing recovery in the share market performance. 2010 dividend growth will lag earnings growth as corporates continue to place a high emphasis on the health of their balance sheet, this will impact those investors chasing yield.

Tempering these forecasts is the RBA’s determination to restore interest rates to normal (around 4.5% to 4.75%). This will mean that interest rates will no longer be benign and will start to actively drag on corporate EPS.

China is still outperforming world economies and so long as this continues our share market should continue to be in high demand.

Michael Hevern
Head of Research

Post to Twitter

Tags: , , , , , , , ,
Posted in Trader Dealer News | 1 Comment

Cell Aquaculture Raises $2.4 Million

Saturday, February 20th, 2010

Cell Aquaculture Limited (CAQ) has secured an initial $2.4 million investment from a large European strategic investment partner.  The Dutch based private equity fund, Linnaeus Capital Partners (Linnaeus), will become a major Cell Aquaculture shareholder having acquired 25 million shares at 9.6 cents per share for its initial investment. Cell Aquaculture’s trading range was approximately 13-14 cents at the time of offer.

This is the first stage of a planned long term funding and investment strategy in Cell Aquaculture, with the shares subject to a voluntary 12 month escrow period.  Linnaeus holds significant investments across a range of industries in small to medium cap companies. It targets high growth potential and now plans to develop a global presence in aquaculture.

Linnaeus Director, Anita Hamilton stated, ”we see tremendous opportunity in the aquaculture industry particularly in the land-based recirculating sector. Following thorough due diligence and having searched the world for a suitable aquaculture investment, we believe that Cell Aquaculture is exceptionally well positioned to capitalize on the booming aquaculture industry.”  “Cell Aquaculture has developed unique technologies, a compelling business model and by collaborating with a strong investment partner, the company can now rapidly develop a substantial international aquaculture business.”

The principals of Linnaeus will be meeting with Cell Aquaculture representatives in both Malaysia and Australia in coming weeks to review the company’s growth plans and develop a further funding and investment strategy. Discussions will also include European expansion opportunities.

Cell Aquaculture Executive Chairman Perry Leach stated, “this is an important milestone for the company. Partnering with a well-resourced cornerstone investor that shares our vision will enable the company to accelerate its growth plans.”  “The additional investment strengthens Cell Aquaculture’s position as the company progresses toward the final stage of securing its large scale Malaysian venture.”

The company’s consolidated cash position is now approximately $3.4 million.

www.cellaqua.com

Post to Twitter

Tags: , , ,
Posted in ASX Company News | No Comments

CordLife Sells A 10% Stake In China Stem Cell Company

Tuesday, December 1st, 2009

CordLife Limited (CBB) announced today that it has completed a Sale and Purchase Agreement with existing minority shareholders of China Stem Cell (South) Company Limited for a 10 % stake. This US$10 million investment provides CordLife a foothold in one of the largest and fastest growing cord blood banking markets in the world. The access to this nascent market will be a catalyst to accelerate the growth of Company. CSC South directly owns a 100 % equity interest in one of the largest cord blood banks in Asia, Municipality Tianhe Nuoya Bio-engineering Co. Ltd (“Nuoya”). Established since 2006, Nuoya is the sole licensed cord blood banking operator in Guangdong province, one of the most prosperous and populous provinces in China. It has exclusive and full access to about 1 million new births in the province annually by virtue of the licensing rules in the country. Adopting a channel-based strategy to access the market, Nuoya has developed strategic sales and marketing network through more than 90 major hospitals in the province to tap on the market’s fast-growing demand for cord blood banking services.

“Our investment in CSC South is a significant part of the Company’s growth strategy. As a result of this investment, CordLife now has access to China, one of the largest and fastest growing cord blood banking markets in the world. These markets are critical in driving long-term sustainable growth for the Company,” said Mr Steven Fang, Group CEO of CordLife Limited, who will be on CSC South’s board of directors.

CordLife operates Asia Pacific’s most experienced and largest network of stem cell banks with full processing and cryopreservation storage facilities in Singapore, Australia, Hong Kong, Indonesia and India as well as marketing operations in Macau, Philippines and Thailand. The Group’s in-depth knowledge of stem cell banking practices and standards are recognised by many international Quality Standard organizations such as the American Association of Blood Banks (AABB), Therapeutic Goods Administration (TGA) and International Organisation for Standardisation (ISO). In 2006, CordLife became the only stem cell bank in the world to be awarded the prestigious World Economic Forum ‘Technology Pioneer’.

www.cordlife.com

Post to Twitter

Tags: , , , , ,
Posted in ASX Company News | No Comments

ING Industrial offers 20% discount in capital raising

Wednesday, October 28th, 2009

ING Industrial Fund has launched a $700 capital raising campaign, aimed at reducing debt and cutting gearing levels.

ING Real Estate, the largest shareholder, will not take up its entitlement, which is causing concern for some institutional investors.

The refinancing plan offers units at 48c, a 20% discount to Monday’s close price of 60c, spread between existing unitholders and an institutional placement.

IIF will remain in a trading halt until the placement is complete this afternoon.

ING Industrial
ASX Code: IIF
Chart from Market Analyser – Gold. Click here to take up a free software trial.

For more on this news story:

Post to Twitter

Tags: , , , ,
Posted in ASX Company News | No Comments

Valad To Raise $59.5 million From Placement

Thursday, September 24th, 2009

Valad Property Group (“Valad”) today announced a fully underwritten equity raising to raise $59.5 million before costs. The estimated net proceeds of $56.5 million from the equity raising will be used to settle the Scarborough Vendors Group deferred liability of £29.5 million.

The equity raising is fully underwritten at an issue price of $0.10 per New Stapled Security (“Offer”). The Offer is made up of two components:   A 1 for 4 Accelerated Non-Renounceable Entitlement Offer to raise $40.2 million;  Approximately $16.8 million institutional component and approximately $23.4 million retail component (“Retail Entitlement Offer”) and an institutional placement to raise $19.3 million (“Placement”)

The $0.10 per stapled security issue price represents a 37.5% discount to Valad’s closing price of $0.16 per stapled security on 22 September 2009 and at a 50.7% discount to 30 June 2009 pro forma NTA. The Offer is expected to result in a pro forma dilution of NTA as at 30 June 2009 of 15.4%; from $0.24 per stapled security to $0.20 per stapled security. New Stapled Securities issued under the Offer will rank equally with existing fully paid ordinary stapled securities.

Valad’s Managing Director, Peter Hurley, said “In the recent past we have received feedback from a number of our existing investors indicating they would be prepared to support raising equity in order to pay down liabilities such as the contracted payment to the Scarborough Vendors Group. The Offer provides existing Valad securityholders with the opportunity to participate at a discount to Valad’s current trading price and will strengthen Valad’s financial position.”

The Record Date for the Offer will be 7.00pm, Monday 28 September 2009 (“Record Date”). The Institutional Entitlement Offer and Placement (together the “Institutional Offer”), will be conducted on Wednesday 23 and Thursday 24 September 2009.

The funds raised from the equity raising will be used to repay the Scarborough Vendors Group deferred liability of £29.5 million.  Goldman Sachs JBWere Pty Ltd is acting as Sole Lead Manager and Underwriter to the Offer.

www.valad.com.au

Post to Twitter

Tags: , ,
Posted in ASX Company News | No Comments

Amcor set to announce acquisition of Alcan

Monday, August 17th, 2009

Amcor has halted share trading today, ahead of an anticipated announcement regarding a capital raising and a $2.4 billion deal securing the company’s acquisition of major competitor Alcan.

The $2.4 billion deal would see Rio Tinto sell its packaging operations, acquired as part of its troublesome Alcan aluminium purchase two years ago.

An article in The Australian points out that Amcor’s raising marks a shift in direction for Australian listed companies, as it’s the first substantial raising in some time which is motivated by asset acquisition rather than debt reduction (though for Rio the debt situation remains).

The $1.6 billion equity raising is expected to be a rights issue priced between $4.20 and $4.30.

The deal must still meet the approval of European Commission regulators.

ASX Code: AMC

Chart from Market Analyser – click here for a free 14-day software trial!

For more details on this news story:

Post to Twitter

Tags: , , , , , ,
Posted in ASX Company News | No Comments

Old dog new tricks – Rights Issues and the Impact on Existing Shareholders

Wednesday, June 17th, 2009

There has been an avalanche of capital raisings in the past twelve months and the pace of these capital raisings seems to be quickening as companies are eager to take advantage of stabilizing credit and share markets. Capital raisings in the past eight months have been in excess of $42 billion dollars.

Many of these company raisings have involved rights issues. Large Cap stocks prefer this method as it gives loyal existing shareholders the opportunity to participate, but it does come at a price of dilution.

RIO Rights Issue

Rio Tinto is in the process of raising $15 billion through a 21 for 40 rights issue at $28.29. This type of capital raising dilutes the existing shareholder base, but does give existing shareholders the opportunity to keep their share of the company by buying additional shares at a discount price.

To understand the impact on the RIO shareholders:

1. Their will be 52.5% (equal to 21/40) more shares outstanding on RIO after the rights issue.

2. To calculate the impact on your average share price.

If you hold 400 RIO valued at say $78.00 on the ex-entitlement date and participate in the rights issue. You will hold $37,141 worth of the stock with an average price of $60.89 (see calculation above) after the completion of the rights issue.

3. If you do not participate in the rights issue then your parcel size will remain at 400 RIO, but you holding will be diluted with the subsequent reduction in share price. If the share price pulls back to the average price then your parcel value would reduce to $60.89*400=$25,354 (compare to $31,200 before the issue).

Note: RIO is dual listed (these calculations are for the Australian listing)

The diagram above shows what happens to shareholdings pre and post the rights issue (assuming price just before ex-entitlements of $78.00). The market capitalisation before the rights issue would be $35.266 billion and post the issue the market capitalisation increases to $42.05 billion.

Conclusion

Rights issues have the benefit of improving the company s balance sheet, but this comes at the expense of existing shareholders as it dilutes their shareholdings. However share price appreciation may resume if investors become more confident about the company s new capital position and its ability to take advantage of business opportunities as they unfold.

By Michael Hevern
Head of Research

Keep up to date with issues with MDSResearch

Post to Twitter

Tags: , , , ,
Posted in Stock Market Analysis, Trader Dealer News | 1 Comment

Mission Energy Raises US$12 million for Biofuels

Wednesday, June 17th, 2009

Mission New Energy Limited (MBT) is pleased to announce that Ir Lee Swee Eng has agreed to invest US$12.325 million in Mission via subscription for 85 million ordinary shares and warrants.

“I believe the business of alternative energy has a long term potential and biodiesel is a critical pillar in the alternative energy mix. Mission’s business model is unique and makes it the ideal platform for short, medium and long-term growth” said Ir Lee.

Mission NewEnergy Limited is a company that owns and operates a 100,000 tpa (approx. 30 million gallons p.a.) biodiesel plant at Kuantan in Malaysia producing biodiesel that exceeds international specifications. It is the only non-German biodiesel producer to be certified by AGQM, the German Biodiesel production process certification body. It is currently building a 250,000 tpa (approx. 75 million gallons p.a.) biodiesel plant with KNM Process Systems Sdn Bhd as a turnkey contractor using Axens’ 2nd generation, heterogenous catalyst, trans-esterification technology and adjacent to the 100,000 tpa plant. It is rapidly developing its upstream feedstock business in India, which is focusing on a drought-resistant perennial plant (Jatropha Curcas) that grows in marginal/poor soil. Jatropha is easy to establish, grows quickly, produces seeds for over 40 years and importantly is inedible. It owns and operates two wind energy turbines of 1.65 MW each in India which sell electricity to a Western Indian utility under a 13 year power purchase agreement. It owns two patent-pending, lab and pilot-tested technologies for production of ethanol from a wide variety of agricultural waste material at a cost substantial lower than reported by competing enzyme based cellulosic ethanol technologies.

www.missionnewenergy.com

Post to Twitter

Tags: , , ,
Posted in ASX Company News | No Comments

« Older Entries