Tuesday, April 24, 2012

Paladin Energy To Issue $US225 Convertible Bond To Meet Debt

Published on Tuesday April 24 2012 (AEST)

URANIUM miner Paladin Energy was a step closer to fixing its debt problems last night, after tapping the bond market for up to $US275 million.

John Borschoff, Managing Director
of Paladin Energy.
Paladin executives were looking to complete their book-build in early European trading last night, as they seek to calm market fears about a short-term debt that is due to mature next year.

The company was recently downgraded to a ''sell'' rating by Patersons Securities on the grounds that it would struggle to cover a $US325 million convertible note that is due to mature in March.

Paladin expects to cover about 60 per cent - or $US200 million - of that convertible note with yesterday's issue of bonds, which are due in 2017.

Paladin was initially offering $US225 million of bonds, but said that could be scaled up to $US275 million in case of strong demand.

The company is considering a sell-down of stakes in several non-core uranium assets, and funds from those sales are planned to cover a large portion of the remaining debt.

The Australian branch of UBS is working with the Royal Bank of Canada and British bank Barclays on the offering.

Paladin shares last traded at $1.68 and will emerge from a trading halt as early as today.

Most analysts spoken to yesterday said the offering might see the share price fall initially, but any progress on covering the $US325 million convertible note would instil confidence in the stock in the longer term.

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  1. I have heard of this company and I still think its a long-term buy. It may take a hit initially, but once its issues on the debt side get sorted, it will be well positioned for long-term growth.

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