Aquarius Platinum falls on bond issue
AQUARIUS Platinum, the fourth largest producer of the metal, launched a $250m (£150m) convertible bond issue yesterday.
The Bermuda-based company said the unsubordinated, unsecured convertible bonds are due in 2015.
The proceeds will be used to redeem 650m-rand (£52.5m) of convertible bonds and build a chromite recovery plant at its Everest mine, in South Africa.
Shares in the miner fell six per cent yesterday – with a dip of 21.1p to 342.7p – after investors took profits following the group’s recent share rally.
“It’s a combination of people taking profits and not seeing this as a prudent refinancing but seeing this as a new issue of equity which would lead to dilution,” said Dominic O’Kane, analyst at Liberum Capital. “I think there has been a bit of an overreaction.”
Aquarius, which operates in South Africa and Zimbabwe, lost $45.7m (£27.6m) in the year ended June 30 following a slump in platinum prices and a surge in the rand.
Production at Everest was suspended in December due to subsidence. Last week, the company said the mine will reopen in 2010.