KME - Still no solution
All,
Please find our updated analysis on KME here.
While the company this week reported results substantially in line with model, it failed to report any news on its financing, or working capital arrangements. The copper producer seems to have revived volumes from its Q4 lows with cash inflows of E35m - effectively from unpaid tax and other bills.
Going forward, however, the company still requires funding in the order of E200m to buy sufficient volumes of copper and the levers for this credit, therefore, remain very much the same as before.
We had been halving our position in the bonds prior to Q1 reporting, due to the increasing delay in the company’s financing arrangements. Overall, however, in a world awash with liquidity, we are assuming that KME will be able to raise the required capital in one way or another, which is why we retain the other half of our position for the time being.
Happy to discuss,
Aengus
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E: amcmahon@sarria.co.uk
T: +44 203 744 7055