Stocks to watch at the open

Australian Agricultural Company Limited's capital raising begins today, while Leighton Holdings is seeing plenty of action.

Australian Agricultural Company Limited (AAC)

Australia’s largest cattle and beef producer, Australian Agricultural Company Limited is due out of its trading halt this morning following the announcement of a capital raising on Wednesday of last week.

Australian Agricultural is raising capital to strengthen its balance sheet and fund their Asian expansion plans. Current debt levels hinder strategic flexibility.

Total funds to be raised are $299.25 million. Of this $219.25 million will come from a non-renounceable entitlement offer and $80 million from a subordinated convertible note. The issue price for shares will be $1.00, which is a 14.5% discount to Wednesday’s closing price.

Currently Australian Agricultural is trading at a discount to the value of net tangible assets – the capital raising could help close this gap.

Leighton Holdings (LEI)

Leighton Holdings – a part owner in Sydney’s Cross City Tunnel through Leighton Contractors – gained 8.58% last week, edging back to prices not seen since May.

Cross City Tunnel has been placed into receivership following the New South Wales Office of State Revenue intentions to appeal a $64 million stamp duty bill dating back to the 2007 acquisition of the struggling toll road.

Leighton Contractors was the leading business segment of Leighton Holdings in the six months to 30 June, generating 34% of revenue.

After flagging a modest outlook reporting for the half year, Leighton has gained 22%.

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