SBM -5.43%: traded for the first time in 2 weeks after announcing terms for a recut deal with Genesis (GMD). The deal sees St Barbara hold on to the troublesome PNG & Canadian assets, however, they will receive a large cash component in the sale of their Leonora asset, earning $370m in the sale as well as picking up ~$170m in Genesis shares. St Barbara will end up with a ~15% stake in the company, with an additional ~4.5% earned if certain production hurdles are met. The cash component will allow the company to pay down their debt, ending up with $197m in cash providing some balance sheet flexibility to turn the rest of the company’s assets around. The market still sees plenty of risk around the execution of the deal, and SBM’s ability to use the balance sheet boost to effect.
MM is neutral to positive SBM
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