Rasia's Special Situations hedge fund continues to build its position as a top five shareholder in ASX-listed TerraCom Limited, which it believes remains deeply undervalued. Rasia has been aggressively investing across the capital structure in high quality thermal and coking coal companies. Based on the TerraCom Investor Presentation released today, EBITDA guidance of AUD 130 million to AUD 150 million and a 5.5 MTPA forecasted production from two operating mines, Rasia sees a conservative case enterprise value of AUD 650 million with a substantial amount of future coal production already sold. This implies a conservative case share price of approximately AUD 1.20 per share for TerraCom as the market becomes comfortable with the consistent delivery of quarterly results. Best case results could be achieved from reaching the higher end of the EBITDA guidance and market precedented EBITDA multiples as well as from various value triggers such as balance sheet refinancing, BNU infrastructure and operational improvements widely discussed in corporate releases and any acquisitions of ancillary assets to the existing operating mines.
Rasia's special situations fund was launched in June 2017 and has delivered exceptional returns since inception by pursuing a private equity approach to public investing in liquid and semi-liquid securities. Rasia primarily engages in privately negotiated bilateral investment strategies involving a short- and medium-term horizon focusing on equities, debt, and convertible debt instruments. The special situations fund currently focuses on natural resources yet maintains the flexibility to pursue attractive investment opportunities across all industries primarily in Asia.
SOURCE: Rasia
