Newcrest Share Capital Raised

Newcrest (NCM) has raise 750$ million on Monday through an institutional share placement. The company has raised the share capital to repay debts and replenish reserves. Newcrest Mining has revealed that it has increased its share placement to $750 million from $500 million because of strong investor interest. Newcrest shares were placed on trading halt to complete the placement.

The placement price of $27.00 a share, was a 12.9% discount to Newcrest’s closing price on Friday, 30 January 2009. The new shares will rank equally with existing shares. The placement was fully underwritten. The shares will emerge from the treading halt this morning. The closed at $31 on Friday. There’s speculation it could buy assets from the stricken Oz Minerals.

The company said, “Newcrest has a number of additional organic growth options with the potential to deliver substantial value to shareholders. Furthermore, the current climate may deliver external opportunities and Newcrest wants to be in a strong position if they arise”. In commentary on its preliminary profit statement, Newcrest said, Statutory Profit after Tax for the six months to 31 December 2008 is expected to be in the range of $147 million to $157 million, compared to a loss of $8.1 million in the corresponding period last year.

Income tax expense of Newcrest on the Underlying Profit in the current period was $104.5 million, resulting in an effective tax rate of 28.9% and operating cash flow was boosted by the stronger revenue performance in the current period: it rose 56% from $377.5 million to $588.5 million. Net debt, comprising total borrowings less cash of $669.3 million (30 June 2008: $291.1 million) increased by $378.2 million during the half year due to draw downs to fund the acquisition of the Morobe Mining Joint Venture and depreciation of the AU$:US$ exchange rate which increased the A$ equivalent of the USD denominated debt by A$204.2 million.