23/01/2009 - 11:07

WA stocks on the hunt for capital

23/01/2009 - 11:07

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Western Australian companies ranging from conglomerate Wesfarmers to juniors Ironbark Gold and AnaeCo have returned to the markets with a vengeance in a bid to tap fresh capital.

Western Australian companies ranging from conglomerate Wesfarmers to juniors Ironbark Gold and AnaeCo have returned to the markets with a vengeance in a bid to tap fresh capital.

In an statement late this afternoon, Wesfarmers announced it had successfully raised $2 billion from the institutional component of its pro-rata non-renouceable entitlement offer announced yesterday.

Wesfarmers said that the total amount raised from institutions was about $2.9 billion, which includes $900 million from placements to mutual funds managed by Capital Research Global Investors and Colonial First State.

Meantime, gold and base metals explorer Ironbark joined gold miner Apex Minerals in a trading halt pending the release of details of a capital raising.

Ironbark last traded at six cents while Apex shares were halted at 38c.

The halts follows news that gold miner Resolute Mining today raised a further $6 million from the placement of shares not taken up in its $54.7 million raising last year.

Meantime, waste recycling company AnaeCo announced today it had raised $1.8 million through the placement of 17.94 million shares at 10 cents each. Shares in the company last traded at 13c.

Last week, Avoca Resources exceeded its $25 million capital raising target with investors subscribing to $28.9 million worth of shares.

The shares were issued at a slight discount to Avoca's current trading price, proving wrong some analysts' advice that companies had to provide generous terms to investors to achieve a successful raising.

Indian Ocean Capital director Christopher Wells told WA Business News the success of Avoca's raising was an exception, given that investors were more likely to part with money to companies already in production.

"The ones that are in production or on the verge of production, they're in a much better position [to raise capital] and banks tend to back those that have completed prefeasibility study or bankable feasibility study," Mr Wells said.

However he has forecast a tough few months for the junior end of town which are currently in the exploration phase and did not necessarily have earnings.

He said Indian Ocean, which focuses on small to mid-tier capital raisings, advised its clients to place a lot of importance on stocks that had cash reserves when looking to invest.

He added that with hedge funds and super funds experiencing an ordinary 2008, investors will be extra cautious about putting money into smaller and medium stocks.

Other companies to have proposed capital raisings this year include gold companies Perseus Mining, which is raising $8.5 million, and Centamin Egypt which will raise some $73 million.

Bentley-based Antaria has also embarked on a share purchase plan to raise $2.4 million through the issue of up to 60 million shares at four cents each.

Shares in Antaria last traded at 4.5c.

 

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