MARKET TALK: Riversdale Capital-Raising Out Of The Blue -Analyst

15th Jul 2010 03:59

0259 GMT [Dow Jones] Riversdale Mining's (RVDM) trading halt today, "pending the outcome of late-stage negotiations regarding a potential capital raising", comes as a surprise given company's existing strategy, good access to finance, says Sydney-based analyst. Little obvious need for fresh capital, given A$260 million in cash and US$800 million from Wuhan Iron & Steel Co. (600005.SH) for 40% stake in Zambeze coal project, announced last month. Some chatter in recent days about Rio Tinto (RIO.AU) selling Chapudi project close to Zimbabwe border, but site is distant from Riversdale's existing assets and doesn't seem to fit company strategy: "They've got their hands full at the moment with their development projects. I'd be surprised if they were willing to divert or embark on a tangent to their current growth strategy," says analyst. Stock at A$10.30 into trading halt. ([email protected]) Contact us in Singapore. 65 64154 140; [email protected] (END) Dow Jones Newswires July 14, 2010 22:59 ET (02:59 GMT)