30 September 2013 – trading update and appointment
Shock news of a potential rights issue to raise £35m at 50p per share has rocked the share price. The company has been struggling due to the weak gold price and a breach of banking covenants is possible, although the test has been deferred for a month to the end of October.
On a more positive note Chris Gillespie, a former executive director of Provident Financial, is due to join as Chief Executive Officer this month. Further news on the company’s financial position and likelihood of a rights issue being launched is expected within 48 hours. Clearly there is a great deal of uncertainty at this stage but the share price more than reflects this in our view. SPECULATIVE BUY.