Paladin, allow me to clarify. The company is raising $175m. That translates to £117m. If the company went to the market today at.55p they would need to issue 21.2 billion new shares. That is 7.6 times more than the 2.8 billion shares currently in issue. For each of us to maintain the value of our holdings we would need to buy 7.6 shares for each share we currently own. This means investing £4.18 for each share we own JUST TO STANDSTILL. If we dont or cant invest this money the VALUE of our shares is reduced by a factor of 7.6 Taking today's price the VALUE of each of our shares (post the capital raise) is .072p. If they increase the issue price by, say, 4 times .55p then we have to buy 1.9 shares (7.6 divided by 4) for each share held today BUT we pay four times more. The end result does not change. In this whole scenario, the true value of shares today is sadly .072p
Role of Banks, The fate of Kenmare is now dictated 100% by the banks. Guesstimates about Ilmenite pricing; changes to Institutional holdings; Iluka intentions etc are interesting side-shows ....... but no more. If the banks decide to work pro-actively with the company in the coming two years then the target of 26p set by Alison Turner (Panmure Gordon) is achievable. A study of banking norms and modalities as it relates to Mining will give a better view of this company's prospects than a study of Mineral Sands Mining
It is stock only. The balance sheet does not support a cash component. Finished here now. Remember my two posts .... when it happens.
ILU.AX Iluka is coming back with a revised offer, but patience will be required by existing shareholders. I have no indication what the revised terms will be or the potential mix between cash and stock. Living in Melbourne has its advantages...........
There is much dreaming about buy-out pricing on this board. Using past placings as a barometer is a total nonsense. Iluka's "bid" values kmr at $1.1b ($795m + debt absorption of $307m) Increase the price to 27p and the value rises to $1.6billion. With realised ilmenite pricing per ton forecasted to be flat at $196 (till 2017), it is simply impossible to justify valuations beyond this. Iluka is returning with a "firm offer" but this will be the absolute upper limit.
29/6 Sunday Independent: "Last week UBS said that it believed that the Iluka bid for Kenmare undervalued the resources company, suggesting that it is worth at least double the amount offered. The approach was described as "slightly opportunistic". -
KMR has surpassed its 50 day moving average (10.8) for the first time in over a year. The next point of resistance is 15p which will be reached (breached??) shortly......
My opinion has no bearing on my entry stock price(s). I believe KMR is completing a three year down-cycle, which is not entirely unusual in this sector. I am fairly convinced that the technical background together with the emerging fundamentals will drive a self-perpetuating up-cycle. Not for the faint-hearted however!!
We have reached the bottom of the cycle. With commodity prices looking to firm, and a more stable power supply scenario, H2 will herald a sustained cyclical upturn.