ZYL Limited (ASX:ZYL): Capital Structure & Capital Raisings
ZYL has proposed a series of transactions that will lead to the settlement of all legal issues and the raising of sufficient capital to fund ongoing development. This will result in a trebling of issued capital and a total capital raising of $13 million (AUD) over the next year or so.
While this is a substantial dilution, the company does have a very robust asset base that should lead to substantial share price appreciation as the various projects are developed. The future capital structure is shown below.
The proposed capital raisings are shown below, with the placement having already been completed. The Kangwane Central and Kangwane North shares will be issued to complete the relevant transactions and for associated fees. The shares issued for the Convertible Notes assumes a conversion at a fixed $0.03 per share.
The “Market Cap” equivalent is intended to show the effect of the various share issues on the market capitalisation of the company. Thus, upon completion the company would have a market capitalisation of $34 million at $0.02 per share.
If one subtracts the $13 million in capital raised, we would have an “enterprise value” equivalent of $21 million. Not much, compared with the net present value of the Kangwane Central project of $144 million (ASX release 30 November 2012), and this is only one of several anthracite projects owned by ZYL.
|No Shares||Price||“Market Cap Equiv”||Percent|
|C Note Exercise||200,000,000||$0.02||4,000,000||12%|
Disclosure: Market Capital holds securities in ZYL Ltd as at the date of publication of this article.