Paladin raising fails to impress

Despite choppy market conditions, the Africa-focused company all but achieved its hopes of raising $70 million, securing $68.2 million through an institutional placement of shares.

Paladin has endured an annus horribilus this year, as an easing uranium price, rising costs, reduced production targets and concerns about debts have savaged the company's share price to barely a quarter of its former value.

Paladin is looking to sell some non-producing assets to free up further cash. The managing director, John Borshoff, said the $68.2 million placement would "provide significant financial flexibility and provide a sound platform for the company to achieve its corporate objectives". The market responded negatively to the raising despite the placement diluting the share base by only 7.3 per cent. Paladin closed 14? lower at $1.17, the company's lowest share price since June 2005.

The Paterson Securities analyst Simon Tonkin attributed the larger than expected share price falls to frustration from existing shareholders. "The raising was a bit of a surprise," he said.

But Mr Tonkin said he expected Paladin's share price to recover, saying the company remained Australia's "number one investment vehicle for uranium" because it was producing more than other uranium stocks on the stock exchange.

Paladin is not the only uranium play seeking funds. Uranex wants to raise $4.7 million through a placement to institutional investors and a share offer to existing shareholders.