OZL - Oz Minerals

[chansw]

Oz Minerals struggles to roll over debt - paper
Sun Dec 28, 2008 5:51pm EST

http://www.reuters.com/article/rbssFinancialServicesAndRealEstateNews/idUSSYD40977820081228

SYDNEY, Dec 29 (Reuters) - Oz Minerals (OZL.AX), the world's second-largest zinc miner, faces a battle to convince one of its lenders, HBOS (HBOS.L), to give it more time to refinance $560 million in bank debt, The Australian newspaper said on Monday.

OZ Minerals, formed in July by the merger of miners Oxiana Ltd and Zinifex Ltd, is due later on Monday to refinance the debt which comprises a $140 million loan and a syndicated credit line of which $420 million has been drawn.

"HBOS are playing really hardball on this," the Australian newspaper quoted an unnamed source as saying.

Basis Point, a Thomson Reuters news service, has reported that lenders Australia & New Zealand Banking Group (ANZ.AX), Commonwealth Bank of Australia (CBA.AX), BNP Paribas (BNPP.PA), nabCapital (NAB.AX), Royal Bank of Scotland (RBS.L) and Westpac Banking Corp (WBC.AX) have already agreed to a refinancing.

But HBOS is reluctant to give Oz Minerals more time, the Australian said, adding that its refusal to give the miner another lifeline could trigger a forced sale of assets.

Oz Minerals has operations across Australia, including the Century, Golden Grove and Rosebury zinc mines, its suspended Avebury nickel mine and its Prominent Hill copper-silver-gold deposit. It also owns the Sepon copper and gold mine in Laos.

The company's shares, suspended since late November, have lost 84 percent of their value this year as the prices of its main metals -- zinc, nickel and copper -- have tumbled.

Nickel on the London Metal Exchange MNI3 is down 63 percent this year, while zinc MZN3 has halved. (Reporting by Mark Bendeich; editing by Jonathan Standing) ($1=1.457 Australian Dollar)

 

[apk]

Ann out today:

In its request for voluntary suspension dated 1 December 2008, OZ Minerals indicated that it expected to be able to make an announcement relevant to its suspension by 29 December 2008. The company has not been able to make the announcement by the indicated dated, but expects to do so tomorrow.

https://www.asx.com.au/asx/statistics/showAnnouncementPDF.do?idsID=00916839

 

[magiceye]

Sky Business Channel is reporting “Oz Minerals gets debt extension to Feb 27”. I wonder if that means another two months of this trading halt...

 

[magiceye]

Sky Business Channel is reporting “Oz Minerals gets debt extension to Feb 27”. I wonder if that means another two months of this trading halt...

Yup - the ASX release is out. The suspension of trade shall continue potentially until 27 Feb.

http://www.asx.com.au/asx/statistics/getAnnPdf(%27/asx/statistics/showAnnouncementPDF.do?idsID=%27,%20%2700916915%27,%20%27Announcement%27);return%20false;

 

[oldblue]

So it looks like the refinancing won't be confirmed until OZL make the necessary asset sales. Unfortunately, this will further weaken their bargaining position and make it even less likely that OZL will achieve satisfactory prices.

 

[GumbyLearner]

So it looks like the refinancing won't be confirmed until OZL make the necessary asset sales. Unfortunately, this will further weaken their bargaining position and make it even less likely that OZL will achieve satisfactory prices.

Unfortunately another terrible outcome for holders. The longer this is delayed the closer to oblivion they will come! IMHO

 

[oldblue]

Unfortunately another terrible outcome for holders. The longer this is delayed the closer to oblivion they will come! IMHO

I tend to agree now.
It looks like the cavalry - in the form of better metal prices - are too far away to be of timely help.

 

[THE BUZZ]

how long can they extend the trading halt to ??
any limitations, or as they see fit?

Holding and can't do a thing about it.

 

[oldblue]

how long can they extend the trading halt to ??
any limitations, or as they see fit?

Holding and can't do a thing about it.

Some of the answers are here - at least in Bryan Firth's opinion.

http://www.theaustralian.news.com.au/business/story/0,28124,24857326-16941,00.html

 

[THE BUZZ]

interesting read, HOPEFULLY the pluses will outnumber the minuses...

2 more months of finger crossing ahead.

Many thanks for link.

 

[Gazzer]

Does anyone have any idea what will happen to my 40 cent call option at the end of Jan? I am long a bundle. I cannot trade out of them as the market is suspended and can't get a price. Can I still exercise them?

 

[oldblue]

Some encouraging news here.

http://business.smh.com.au/business/oz-minerals-set-to-offload-prominent-hill-20090112-7f7v.html

Just a pity that it's probably OZL's best asset and a very big part of its growth potential.

 

[electronicmaster]

Some encouraging news here.

http://business.smh.com.au/business/oz-minerals-set-to-offload-prominent-hill-20090112-7f7v.html

Just a pity that it's probably OZL's best asset and a very big part of its growth potential.

If they still have working Copper and Gold mines? Then it is POSSSIBLE that OZL could come out a winner within the year.

My fingers are crossed. I hope things work out for them. I'll be very interested in a peace of that pie if China demand is starting to be on the rise.


Still, more investigating on my part to be done before they see my money again. But I really hope OZL does this right.

 

[aleckara]

Does anyone have any idea what will happen to my 40 cent call option at the end of Jan? I am long a bundle. I cannot trade out of them as the market is suspended and can't get a price. Can I still exercise them?

From my understanding it will expire worthless. If so would have been great to go short on a Dec ending option - it would have likely never been exercised.

 

[sails]

Does anyone have any idea what will happen to my 40 cent call option at the end of Jan? I am long a bundle. I cannot trade out of them as the market is suspended and can't get a price. Can I still exercise them?

Here's a link to another thread on OZL options with some discussion around Dec08 expiry. https://www.aussiestockforums.com/forums/showthread.php?t=13679

Also a link to the relevant notice for Dec09 expiry found on the ASX site: http://www.asx.com.au/products/pdf/notices/2008/Clm22708.pdf

And a link to 2009 notices - it's where you will most likely find out what will happen for Jan09 options: http://www.asx.com.au/products/options/notices/2009.htm. It's only got one announcement so far this year, but this is the page to watch if you have options in a stock that is not behaving normally.

You may be able to exercise your calls as there have been a few put exercises occouring almost every day - best thing is to ask your broker. Of course, by exercising a long call, they are being converted to stock and will require more funds going into OZL so you would have to be pretty convinced this stock will be OK for your trading style.

 

[sails]

From my understanding it will expire worthless. If so would have been great to go short on a Dec ending option - it would have likely never been exercised.

40c Dec options would have been risky - the ACH used a reference price of 55c (last traded price) so automatic exercise could have been a problem for those who thought they would just expire worthless. Some calls were exercised up to the 50c strike for Dec expiry. Found on historical course of sales on the 19th Dec for expiry exercises.

 

[dandyjac]

Oz minerals has just got it's bridging finance agreement in place could give them a little breathing space.

http://www.asx.com.au/asx/research/...lts.jsp?searchBy=asxCode&allinfo=&asxCode=ozl

 

[dj_420]

If they still have working Copper and Gold mines? Then it is POSSSIBLE that OZL could come out a winner within the year.
QUOTE]

A winner? I dont think we could really call this outcome a winner, they do have operating gold and copper mines but they are selling their best assets now at very distressed prices.

For examples sake (All hypothetical figures) say they were earning 10 cents per share and puts them on a PE of 5.5 (At 55 cents). They sell Martabe and PH and lose 3 cents per share earnings and the potential earnings for 7 cents per share. We then have OZL relist with less debt and less earnings. The PE then increases and will be subsequently sold down.

The point been that they are flogging off assets to reduce debt which unfortunately will reduce earnings and earnings capacity. PH was supposed to be the flagship mine, they have been working towards mining this for the past 5 years I think. To have to sell PH at the final hurdle is ludicrous, AM should be ousted as soon as possible. He has destroyed shareholder wealth and burnt through the combined war chest of OXR and ZFX in a matter of months.

The only good outcome I see of this is that OZL assets are snapped up by Australian companies and can retain some more Australian jobs. One of the jobs that should be vacant IMO is AM's.

 

[random]

The price of gold has jumped markedly today (up $42 per oz).
Personally i believe it will jump considerably more and it has only just got started (but thats just me).
Prominent Hill's value is not to be underestimated by anyone but its worth may be. I just hope that OZL shareholders will still be able to benefit from it (other than selling this prime asset ) once operations commence.
If only the banks would be more patient and not for that much longer either.
Everyone would and will recieve everything they are entitled to and more if they just hung in there.
What a tragedy if we have to part with it.........so close but so far.

 

[johenmo]

Business Spectator 7:18 30 Jan 09
"OZ Minerals expected to cut 1200 jobs
Debt-laden mining company OZ Minerals Ltd will detail 1200 job losses in a meeting scheduled for the release of its December quarter production report today, The Age reports.
The world's second largest zinc miner is expected to shed staff and contractor positions from Australian, Indonesian and Laotian operations, the paper said.
Oz Minerals persuaded its bankers to provide it with a bridging finance facility of up to $140 million on January 22.
The company remains suspended on the ASX after being placed in a trading halt on November 28. Its shares last traded at 55 cents. "

Not surprising. Other miners are sacking people. Why should OZL be any different. And they aren't the most inspiring example of a healthy company atm. We're supposed to hear something soon, aren't we?

DISC: I hold a smattering. (Enough to buy a Big Mac. )