Centennial to undertake capital raising

CENTENNIAL Coal Company hopes to raise $40 million to restructure its balance sheet following last year’s purchase of a 50% stake in the Springvale mine.

Staff Reporter

The company will place 6.1 million shares at 90c per share to raise $5.5 million. Current shareholders will be offered a renounceable rights issue of one new share for every three existing shares at 85c per share to raise $13.2 million. The company will also make a General Offer of 23.7 million shares at 90c per share to raise $21.3 million.

 

Bob Cameron, managing director of Centennial, said the purpose of the equity raising is to provide the company with the financial flexibility to pursue future growth opportunities.

 

“This enhanced balance sheet combined with the major operations at Clarence and Springvale will ensure strong and sustainable earnings, as well as providing an excellent springboard for Centennial to continue to grow and add value for our shareholders,” Cameron said.

 

According to Cameron, Centennial's earnings before interest, tax and depreciation for the 2002 financial year are forecast to increase to $33.5 million. Forecast net profit after tax in that year is $17.8 million, representing earnings per share of 20.8 cents. The equity raising is being underwritten by JP Morgan.