IMPLATS TO ISSUE NEW SHARES AS CASH BALANCE DIPS
Impala Platinum added to the pervasive feeling of gloom around South Africa’s core economic sectors this week by asking shareholders to authorise 172 million new shares to raise capital.
That’s a full quarter of the shares Impala has in the market at the moment, signalling that it could accept very low prices for the shares – a sign of desperation for funding.
The potential for diluting the interest of existing shareholders is spectacular. And the scale of new shares compared with the target amount Impala wants to raise – R4 billion – implies a minimum value of R23 per share, depending on how much investors are willing to pay. That’s half the current share price. The capital is meant to pay for the continuance of the company’s two major developments after its cash balance dropped from R4.1 billion to R2.6 billion.
The company made the share issue announcement alongside its financial results for the year to the end of June.
In the year, Impala’s headline earnings, a measure excluding noncash and one-off expenses, fell from R523 million to R221 million.