Mining services firm Bradken plans to recapitalise
THE fortunes of mining services group Bradken could be boosted if a reported recapitalisation plan goes ahead.
Shares in Bradken were yesterday placed in a trading halt amid speculation about a potential recapitalisation plan to provide a cash injection for the troubled company.
CHAMP Private Equity is said to be behind the plan to help the company refinance more than $400 million worth of debt ahead of June 30. The proposal is believed to be under consideration by Bradken’s board.
The company said it will make an announcement regarding the speculation before the sharemarket opens on Monday.
However, CMC Markets chief market analyst Michael McCarthy said, while details about the plan were unclear, it could be good news for the embattled engineering firm.
“An injection of $50 or $60 million could be enough to get them through the current woes without causing too much grief for existing shareholders,” Mr McCarthy said.
“The ideal result for the company would be an … injection of funds that doesn’t significantly dilute shareholders.”
The refinancing talk comes after Bradken’s chief executive Brian Hodges earlier this month announced his retirement after 18 years with the mining equipment and machinery maker.
In April Bradken rejected a $428 million takeover offer from private equity firm Pacific Equity Partners. That was after the company cut about 500 jobs in a major restructure in 2013-14 amid lower revenue from its mining products, mineral processing, rail and engineering divisions.
Bradken shares have slumped in recent times, dropping from $5.08 in August 2014 to $1.72 before yesterday’s trading halt.
source:- http://www.dailytelegraph.com.au
Comments are closed.