Stock Name: Pac Andes
Company Name: PACIFIC ANDES RESOURCES DEVLTD
DBS Vickers Securities in a Mar 8 research report says: "The group proposed a 1-for-2 renounceable under-written rights issue at 14 cents per rights share to raise c.S$220 million net proceeds.
"Purpose of the rights issue is to enhance its financial position, and for working capital and general corporate purposes, which we feel are vague explanations. This will be the third rights issue since 2007, and will probably not go down well for investors, in our view. We have not factored in potential dilution from the rights issue.
"Based on our proforma estimates, the rights issue could dilute our target price to c.16 cents, still based on 5.5x FY12F PE. We believe management has inorganic growth plans on the cards and the group may be looking to increase its stake in Tassal Group. MAINTAIN HOLD."
Company Name: PACIFIC ANDES RESOURCES DEVLTD
| Research House: DBS Vickers | Price Call: HOLD | Target Price: 0.16 |
DBS Vickers Securities in a Mar 8 research report says: "The group proposed a 1-for-2 renounceable under-written rights issue at 14 cents per rights share to raise c.S$220 million net proceeds.
"Purpose of the rights issue is to enhance its financial position, and for working capital and general corporate purposes, which we feel are vague explanations. This will be the third rights issue since 2007, and will probably not go down well for investors, in our view. We have not factored in potential dilution from the rights issue.
"Based on our proforma estimates, the rights issue could dilute our target price to c.16 cents, still based on 5.5x FY12F PE. We believe management has inorganic growth plans on the cards and the group may be looking to increase its stake in Tassal Group. MAINTAIN HOLD."
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