Alumina Ltd’s surprise billion dollar cash approach to the market wasn’t the turn off some might have thought.
The company yesterday surprised with the news that the $1.02-billion entitlement offer has raised $93 million more than expected from institutions.
That will cut the number of cut-price shares available to small investors.
The bauxite miner and alumina-refining business announced the issue at $1 a share, a deep, 49% discount to the then market price.
It anticipated raising $644 million from institutions and a further $378 million from a retail entitlement offer.
It probably won’t get the full billion, but the $93 million of over subscriptions from the market is a vote of confidence in the company, despite the poor outlook for bauxite, alumina and aluminium.
But in yesterday’s statement Alumina said the institutional component had raised about $737 million, leaving only about $285 million needed from small investors.
"While the size of the total entitlement offer remains unchanged the proportions between retail and institutional offers have changed," the company said.
Alumina chief John Bevan said "The completion of this offer positions Alumina to withstand the current uncertainty in global markets and retain upside leverage to an improvement in market conditions".
Investors will be offered a 7-for-10 accelerated non-renounceable pro-rata entitlement offer at $1 per share under the deal.
The shares ended down 11% at $1.32, a fall of 17c, which wasn’t such a bad outcome given the size of the issue.
Sims Metal Management Ltd says its unaudited net profit for the first nine months of the current financial year will be about $79 million before write-downs.
The figure does not include a $173 million write-down on the value of its North American division disclosed in Sims’ first-half result release in February.
Further details will be included in its third-quarter earnings report due on Thursday, May 7.
No profit guidance was issued by the company when it announced its first-half result in February.
But it did earn a net loss after tax after the impairment charge of $79.4 million, which included a non-cash goodwill impairment charge of $173.0 million.
"EBITDA (earnings before interest, tax, depreciation and amortisation and goodwill impairment charge) of $254.1 million was up 3 percent on the prior corresponding period.
"Sales revenue increased about 104 percent to $5.58 billion in the first half of the 2009 financial year, largely as a result of the merger with Metal Management," Sims said in February.
The world’s largest scrap-metal recycler said in February all its operations had been hit by the global recession.
It forecast $40 million in savings each month as a result of cost-cutting measures implemented in the second quarter of the current financial year.
Sims’ 2007-08 full year net profit was $433.16 million.
Its shares were up 57c to $21.11 yesterday.
Lion Nathan shares eased 2c yesterday to $11.72 after the company said an implantation agreement with Japan’s Kirin Holdings to acquire shares in Lion Nathan that it does not already own is expected to be finalised in the next week.
Lion Nathan said in a statement to the ASX that it was still in talks with the Japanese beer-maker Kirin.
Last week Lion Nathan’s independent directors agreed to a deal for Kirin to acquire the shares for the equivalent of $12.22 each.
Kirin will acquire the 53.87% of shares in Lion Nathan that it does not already own.
And Macquarie Media Group securities had a good gain yesterday, rising 10.8%, or 14.5c to $1.49 after the group said it had successfully completed an off-market buy-back of $22.1 million worth of its issued capital.
The company purchased 14,723,415 stapled securities, or 7.1%, at $1.50 per security, a discount of 8c.
All eligible tenders submitted in the buy-back tender were accepted in full, Macquarie Media said.
Macquarie Media shareholders approved the off-market buy-back in April.
The company said that an on-market buy-back of up to the lesser of 72.2 million stapled securities or $27.9 million worth of shares will continue, in addition to an on-market buy-back of up to 13.6 million stapled securities initiated in December.
