Paladin pulls plan for Nambian mine sale
Uranium miner Paladin Energy has left investors "perplexed" after plans to sell a stake in its flagship mine were ditched in favour of a share placement.
After more than seven months of courting bidders, and numerous reassurances that the sale was progressing well, Paladin boss John Borshoff conceded on Friday that suitors were not willing to pay enough for the stake in Namibia's Langer Heinrich mine.
Mr Borshoff said low uranium prices had distorted valuations of the mine's value. "The current depressed uranium price has meant that it is unlikely that a price that appropriately reflects the strategic value of the asset will be achieved and accordingly proceeding at this time would be detrimental to long-term shareholder value," he said.
"Paladin strongly believes it can generate greater value to its shareholders through postponing the sales process for Langer Heinrich until there is a more favourable uranium price."
Proceeds from the sale had been intended to pay down debt, and Paladin was forced to lurch to a share placement to ensure it was fully funded for the next 12 months.
The company said it wanted to raise up to 15 per cent of its issued capital but is expected to raise between $US80 million and $US100 million ($90 million and $112 million).
The placement could see Paladin's shares slump to about 70¢ when they emerge from a trading halt on Monday.
Octa Phillip analyst Andrew Shearer said he was "perplexed" by the termination of the sale. "We are definitely surprised about the change in direction for the asset sale process given recent guidance that the process was continuing on track toward a successful conclusion," he said.
The change could revive pressure on Mr Borshoff, whose 20-year tenure at the company has attracted criticism for his high salary and record of over-promising but under-delivering.
The company expects to book a $US180 million impairment at next month's full year results.
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