Uranium One Private Placement Extension Comes as No Surprise

Jun.15.09 | About: Uranium One (SXRZF)

Uranium One Inc. (OTC:SXRZF) has extended the timeline to complete its previously announced $270-million private placement of 117 million shares at $2.30 each with a Japanese consortium to Dec. 15, 2009. Given the recent uncertainty in Kazakhstan, this doesn’t come as a big surprise.

The extension does not pose any risk to Uranium One’s balance sheet, according to Canaccord Adams’ Orest Wowkodaw. At the end of the first quarter, the company had more than $200-million in cash and about $180-million of debt. The analyst also pointed out that Uranium One’s debt obligations are not due for some time, with approximately $61.9-million due at the end of June 2010 and $117.6-million due at the end of 2011.

“The proposed transaction was never consummated to shore up the company’s balance sheet,” Mr. Wowkodaw said. “However, the extension to mid-December may be viewed as a negative by the market as it suggests that the uncertainty in Kazakhstan could take some time to resolve.”