In today’s briefing:
- MMG (1208 HK) – $1.1bn+ Rights Offering – Expect Regular Rights Trading Dynamics
- MMG (1208 HK): US$1.2bn Highly Dilutive Rights Issue
- Northern Minerals (NMI AU): Chinese Investors Forced To Exit
- MV Australia A-REITs Index Rebalance Preview: ASK May Be Deleted; HMC Close Add; Capping Changes
- MMG Limited’s Rights Issue (1208.HK)
- Amaero International Ltd – Atomiser commissioned ahead of June 30 deadline
MMG (1208 HK) – $1.1bn+ Rights Offering – Expect Regular Rights Trading Dynamics
- Mmg Ltd (1208 HK) today announced a 2:5 Rights Offering to raise US$1.15bn at HK$2.62/share in order to pay down debt from their recent Botswanan copper mine acquisition.
- It was a sizeable acquisition, and the near-term EV/EBITDA of the acquisition is 10x or above. The longer-term EV/EBITDA is in the 3s based on expansion later this decade.
- The Rights Offering is underwritten, supported by its 67.5% owner. SOUTHBOUND holds 10+%. There are short dynamics, arb dynamics, “don’t wanna spend more” dynamics. There’s a path here.
MMG (1208 HK): US$1.2bn Highly Dilutive Rights Issue
- Mmg Ltd (1208 HK) will raise HK$9.1bn (US$1.2bn) through 2 rights shares for every 5 existing shares rights offering. The rights price is HK$2.62, a 24.7% discount to the TERP.
- The rights proceeds will be used to repay existing debt, which will allow it to use other funds to better support the ongoing development of the operating mines.
- MMG shares should continue to decline heading into the ex-rights date. The shares go ex-rights on 11 June, and the rights start trading from 24 June to 2 July (inclusive).
Northern Minerals (NMI AU): Chinese Investors Forced To Exit
- Back in February last year, the Aussie Treasurer prohibited Yuxiao Fund from buying an additional 9.92% in Northern Minerals (NTU AU) which would have increased its stake to 19.9%.
- On the 20th November 2023, Yuxiao sought the removal of Nicholas Curtis as director of the rare-metal play at an EGM; however Curtis resigned his post and the EGM cancelled.
- The Aussie Treasurer has now made orders requiring Yuxiao and four (deemed) associated investors to sell their holdings (~10.4% all-in) within 60 days.
MV Australia A-REITs Index Rebalance Preview: ASK May Be Deleted; HMC Close Add; Capping Changes
- The review period for the June rebalance ended last week. There could be one deletion from the index and a bunch of capping changes.
- There is one stock that is close to inclusion zone but may not make it in June.
- The expected index changes will lead to a one-way turnover of 2.5% resulting in a one-way trade of A$14m. That will increase if there is an inclusion.
MMG Limited’s Rights Issue (1208.HK)
- Short term overhang from expanded share count and selling from unwilling participants
- The copper supply and demand story is intact and the fundamentals of the company remain strong
- Parent’s uptake of the rights is positive but the stock will take time to build a base for the next leg up
Amaero International Ltd – Atomiser commissioned ahead of June 30 deadline
- RaaS Research Group has published a flash comment on advanced materials manufacturing group Amaero International (ASX:3DA) following its announcement that the first atomiser has been commissioned at its Tennessee facility ahead of schedule.
- The commissioning is an important step toward the production of C103 and specialty alloy powder at the facility and allows the company to move to the next step of achieving qualification and, ultimately, commercialisation.
- Amaero’s announcement underpins our confidence in the production timing we have applied to our estimates.
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