Losses force MacMahon’s hand

MacMahon Holdings will attempt to raise $60 million through an entitlement offer and share placement.

MacMahon Holdings will attempt to raise $60 million through an entitlement offer and share placement, the mining contractor announced this morning.

According to the company, a 30 to 40% drop in monthly revenue and significant financial costs of up to $15 million due to restructuring and severe wet weather have forced it into its equity raising position.

“These factors have increased working capital requirements, reduced cash reserves and increased debt by $52 million and gearing from 12% in December to 36% at 31 March,” the company’s statement read.

MacMahon will offer it shares at $0.32 each, which represents a 20% discount from the last traded price.

Rival mining contractor Leighton Holdings, which already owns 17.5% of MacMahon, has also agreed to increase its stake in the company to a maximum of 19.9%.

MacMahon believes that the equity raising will place the company well for the continued uncertainty in the market.

“Capital raising will improve Macmahon’s ability to navigate the current economic environment and put Macmahon in a position of greater strength,” the statement read.

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