IM­PLATS TO IS­SUE NEW SHARES AS CASH BAL­ANCE DIPS

CityPress - - Business - – Dewald van Rens­burg

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.

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