Hard-coking coal specialist Pike River Coal, whose inaugural export shipment left for India last week, is tipped to announce a $20 million-plus rights issue when it delivers its six-monthly financial report today.
Talk of a rights issue by Pike, to underpin short-term working capital, has been rife for several months: analysts have been predicting the seeking of between $20 million and $45 million.
Craigs Investment Partners broker Peter McIntyre said Pike had several capital-raising operations to consider, such as going back to its banks or possibly to listed NZ Oil and Gas, which spun off Pike and retains a 29.5% stake in the company.
However, he believes Pike will give details today of a "$20 million-plus" rights issue, of around one new share for every 15 existing shares.
"That 1:15 [rights issue] would have less of a dilution effect on shares," Mr McIntyre said.
Pike flagged the likelihood of the need for $20 million in October last year as a series of delays postponed export deliveries by 20 months, resulting in a $50 million spending blowout and the need for more cash for capital running expenses as it moves to ramping up to full production.
A year ago, Pike reported a $9.6 million loss for its first-half trading to December from an unrealised foreign-exchange loss of $10.8 million.
Mr McIntyre said yesterday its after-tax profit for the first six months to December was expected to be a $7.6 million loss.
Craigs had forecast a full-year profit for 2010 but because of the delays, that forecast was now for a full-year 2011 profit of about $50 million.
Pike has spent $270 million developing the isolated West Coast mine since listing two and a-half years ago.
