New light on a stubborn Pearse

For the first few months of this year Pearse was under intense pressure to ease the company's balance sheet woes by raising new equity.

The concerns were exacerbated by Boral's main $US700 million debt being blown out by the fall in the exchange rate and its US operations being hit by the sharp slump in house construction in North America.

A downgrade to its credit rating did not help matters. But Pearse held his ground. Instead, he sought to ease the group's balance sheet problems by selling Boral's 17.6 per cent stake in Adelaide Brighton for $210 million and selling and leasing back some properties.

Since their March low of $2.29, Boral shares have more than doubled. They rose 9c to $5.03 yesterday.

And since that pressure for an equity raising, optimism has started to grow that both the slumps in US and Australian housing have bottomed.

Despite outraging shareholders over the lavish $3.5 million in bonuses he earned last year, Pearse appears to have partly redeemed himself by avoiding a massively dilutive placement.

In a cautious note to clients yesterday Macquarie Equities said any uplift from the housing market could be diluted by the slump in non-residential construction. The broker even warned of further earnings downgrades in 2009-10.

But Macquarie said the signs of life in US housing "bode well" for Boral. From a forecast $90 million pre-tax loss in 2008-09, the broker said the US business (which is the biggest millstone around Boral's neck) could return to profit in 2010-11.

Whitehaven joins hunt

Whitehaven Coal has joined the growing list of mid-tier miners in the hunt for bolt-on acquisitions after raising $180 million and indicating the potential to sell another 7.5 per cent of its Narrabri project, which could bring in an extra $125 million or so.

Whitehaven recently lost out to the Hong Kong commodities trader Noble Group in its bid for Gloucester Coal and is in negotiations for some smaller acquisition opportunities.

Keith Barker, the managing director of one seemingly logical candidate, Northern Energy  which has a project adjoining Whitehaven's exploration ground in the Gunnedah Basin  ruled his company out. Northern Energy is in talks with customers, traders and miners about its projects, but Whitehaven is not among them.

Whitehaven will use some of the funds from its institutional placement and accompanying share purchase plan to acquire some rolling stock.

The shares were offered at $3.05  well above the $2.90 floor price due to strong interest  with help from underwriters Wilson HTM and UBS. That represented just a 5 per cent discount to its previous closing price of $3.21.

Meanwhile, Linc Energy, which turns coal gas into liquid fuel,

is trying to raise $50 million via an institutional placement, which closes today, and share purchase plan.

The money will be used for working capital, extra coal resource drilling, the purchase

of some small US assets and

the acceleration of work on its full-scale plant.

It is seeking to raise the funds at $1.40 a share, a 9.7 per cent discount to its last closing price of $1.55 a share, with help from BBY.

Money or the shares

For most companies, banking an extra $260 million in cash, beyond the $750 million or so already on its balance sheet, would be a good look.

But with many investors in Macquarie Airports already upset that it has agreed to buy out Macquarie Group's management rights with scrip that is trading well below the value of the company's assets, the extra cash raises some more questions about that deal.

Although MAp had indicated in May it was very likely to receive the money from the sale of its stake in Japan Airport Terminal, its management team did not include it in the cash figures mentioned in an already tense investor briefing last Friday.

The market was curious as

to what MAp had planned for the $750 million, and if much of that would need to be injected into its debt-laden assets like Sydney Airport and Copenhagen Airport.

Management indicated the funds were for a rainy day, and that it was prudent to have a lot of cash in times like these.

But now that the cash pile has reached $1 billion, some investors may have been happier if it had bought the management rights from Macquarie Group using its cash rather by giving it scrip that is potentially worth $645 million, based on MAp's asset backing.

LNG rivals talk

In the race to build a big Queensland liquefied natural gas project based on coal-seam gas, it is well known that BG Group and the Santos/Petronas joint venture are ahead of Shell and Origin Energy/ConocoPhillips.

It's arguable whether all the projects will get up or some form of consolidation will occur.

But it is clear that talks are taking place behind the scenes, and one of the groups has hinted that the idea of a massive joint venture between all four projects has been floated.

"There have been conversations with all of [the rival groups] at certain levels and we remain open to that possibility," Conoco's chief executive, Sig Cornelius, told analysts yesterday.

"I would say it's doubtful that it would come together, that it would make sense for all parties at this point. But we're certainly open to that opportunity."

In contrast, BG Group was not questioned about its plans for Queensland during an analyst briefing that accompanied the release of its results on Wednesday night.

xchange@smh.com.au