ProActive Investors UK & USA
PROACTIVE NEWS SUMMARY: Metals Exploration, BP, Fastnet Oil & Gas,
Manchester United, Allocate Software
Metals Exploration (LON:MTL) was among the top performers in the mining sector today after the group released details of a funding package it flagged just over two months ago which would finance the construction of the Runruno gold-molybdenum mine in the Philippines.
It has commitments from existing shareholders to raise US25 million in a share issue and has agreed a US$105 million loan with Solomon Capital, a significant shareholder.
The company had flagged in late May that it was in the transition period before becoming a producer at its flagship project and would soon announce news on a debt funding package.
Metals Exploration will put the financing proposals to shareholders shortly, asking them to approve the debt funding and the issue of 124.07 million new shares at 13 pence each, a 53 percent premium to yesterday’s closing price of 8.5 pence.
John Meyer, mining analyst at Fairfax Securities, pointed out that the premium at which the equity was raised reflects the confidence that the company’s key shareholders have in the project.
The stock rose after the news was released this morning and by 3.05pm, was trading up 16.2 percent at 9.9 pence.
The placing shares have been subscribed for by Solomon Capital, Baker Steel Capital Managers and Runruno Holdings Ltd, each either a substantial shareholder or part of a concert party that is a substantial shareholder.
The term loan facility will have a 4 year term commencing at first utilisation and an annual interest rate of 20 percent. Repayment will be made by instalments matched to cashflow.
Management expects to draw down the facility in stages and that the repayment schedules will be satisfied within the 4 year term.
The share issue will take Solomon Capital’s stake in Metals Exploration to 47.49 percent from 46.46 percent, Baker Steel’s will rise to 23.18 percent from 22.6 percent and RHL’s holding will rise to 18.31 percent from 17.90 percent.
Executive chairman Ian Holzberger said: “I am delighted that we have been able to procure this financing proposal, in the face of a difficult global outlook for both equity and debt funding. We now look forward to moving forward into the full construction phase on completion of documentation of the debt funding.”
Another article by Proactive Investors was dedicated to today’s heaviest faller in the FTSE 100 – oil and gas supermajor BP (LON:BP.) – which slumped four percent on weak second quarter earnings.
For the three months to June 30, the group, which rarely seems out of the headlines these days, posted a loss after tax of US$1.39 million – compared to a net profit of US$5.72 billion in the comparative period last year.
It was hit by falling oil prices, maintenance costs and a massive $5 billion write-down on the value of its assets.
The global group was also pounded by a US$847 million charge during the quarter to cover costs relating to the disastrous Macondo oil spill in the Gulf of Mexico two years ago.
Meanwhile, the US$4.78 billion impairment charge was on the value of US assets, including certain refineries, shale gas assets and its decision to suspend the Liberty offshore oil project in Alaska, BP said.
Today’s results also revealed the firm’s share of net income from the
joint venture TNK-BP was $700 million lower than in Q1 because of the
rapid fall in oil prices amplified by the lag in Russian oil export
duty, which is based on earlier higher oil prices.
Broker Oriel, which rates the shares a ‘hold’, said today’s “poor”
results coupled with a weak outlook for Q3 is likely to lead to
earnings downgrades.
“With resolution of the Macondo litigation still outstanding and a
conclusion of the TNK-BP sale process unlikely before late October
plus a weak 3Q outlook, the short term holds little for BP,” said
analyst Richard Griffith.
We also covered a broker note on Fastnet Oil & Gas (LON:FAST) from
finnCap, which said the oil firm will continue to gain momentum as new
investors are introduced to its story.
Fastnet joined AIM in May and since then it has moved swiftly – adding
projects in Ireland and Morocco, and quickly gaining a following of
investors.
And the stock has gained over 30 per cent, rising from 11p to around
17p a share, in recent weeks as it has sealed these deals.
“The team has been doing the rounds over the last week which is
reflected in the share price,” the broker told clients today.
“However, we believe the stock will continue to gain momentum as new
investors are introduced to the story. If you are looking for high
impact this could be the one for you.”
The broker adds: “The company has managed to acquire some very
prospective licences which offer exposure to high impact/high risk
exploration at a low cost.”
“Their strategy is clear and they have a management team who have
achieved similar successes in the past and have enough cash to fund
their current commitments.”
Pointing to the newly acquired assets in Ireland and Morocco finnCap
says Fastnet has now put in place ‘two legs’ of a ‘three leg
strategy’. And it says the firm is looking for another asset in
Africa.
“Key to the strategy is acquiring stakes in high impact exploration
areas early on which are likely to catch the eye of the majors when it
comes to doing a farm-out.”
Away from oil and gas, Premier League runner-up Manchester United has
kicked off its US initial public offering plans, calming fears the
club would put yet another listing on hold.
The 19-time English champions are to sell 16.7 million Class A shares
on the New York Stock Exchange, priced between US$16 and $20 each, to
raise up to US$334 million (£213 million).
The funds will go towards paying off its huge debts, estimated to be
as much as £437 million.
The club hopes to debut the shares in New York on August 10.
Man United’s US owners, the Glazer family, who controversially bought
out the club between 2003 and 2005 saddling it with debts of over
US$850 million (£541 million), are reportedly set to score US$141
million (£90 million) if the IPO goes ahead.
According to reports today, half of the 16.7 million shares being sold
at this week’s roadshow belong to the Glazers, who also own NFL giants
the Tampa Bay Buccaneers, meaning only half the proceeds will go
towards reducing the club’s debt.
The owners had previously implied that all the money from the IPO
would be used to ease the club’s financial troubles, which were not
helped when it failed to reach the knockout stages of the lucrative
Champions League last season.
Reports last week suggested the club had decided against the float
after subdued interest in buying shares in Manchester United.
The club had already shelved plans last year for a £640 million
listing in Singapore.
Almost half of Man United’s 659 million strong fan base hails from the
Asia Pacific region, while it has far fewer fans in America.
Football in the US lags behind the big three American sports –
baseball, American football and basketball – in terms of popularity.
Shares in the world’s most popular football club will be traded under
the ticker MANU.
We also took a closer look at Allocate Software (LON:ALL), whose
latest purchase, RealTime Health may match the revenues of its core
business in under five years, according to chief executive Ian Bowles.
Allocate is paying £1.2 mln upfront, followed by performance payments
of up to a further £6 mln, for the hospital bed software group.
Bowles says he can see RealTime generating similar revenues to
Allocate’s Health Roster product as bed management becomes more widely
recognised as an area where the NHS can save huge sums of money.
Reports by the respected research group the King’s Fund suggested
better use of its beds could save the NHS £1bln per year.
Bowles told Proactive Investors that Allocate can now combine patient
and staff management into a single solution, giving it a unique
advantage in the market.
And with its existing relationship with the NHS, Bowles believes it
can drive the adoption of this type of technology.
Broker Numis also suggests the acquisition could be “big” for Allocate.
“We see scope for significant growth in this, not just on a standalone
basis, but also through combination with Allocate’s rostering software
that will enable hospitals to match staff availability to demand and
potentially save significant costs,” said the broker.
The acquisition followed another year of record revenues for the
health software group.
Turnover rose by more than a fifth to £36.6 mln in the year to May,
with all businesses doing well and the group re-introducing a dividend
with a 1.2 pence final payment.
The UK Healthcare business “prospered”, driven by the ongoing
restructuring of the National Health Service (NHS).
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