LONDON, Oct 24 (Reuters) - Shares in zinc and lead focused mining and refining group Nyrstar closed at a record low on Wednesday, a month after the highly-leveraged company issued a profit warning.
The shares ended 28 percent down at 1.47 euros, down 70 percent since Sept. 21 when Nyrstar warned that adverse market conditions, primarily due to low zinc prices, would lead to an EBITDA result for the second half that was “materially below” the first half.
A Nyrstar spokesman declined comment.
The price of zinc has fallen 20 percent this year.
Analysts have issued negative outlooks for the company and Moody’s cut Nyrstar’s rating in September, citing concerns of its liquidity and ability to refinance 350 million euro worth of bonds maturing next year.
“Nyrstar bond values have been declining as the market was getting nervous about Nyrstar’s high leverage. The company’s share price has been slow to reflect these concerns,” Philip Ngotho, equity analyst at ABN Amro, said.
“We think that the equity is still overvalued at this price, in line with our view published in our August report.”
In its August report ABN Amro lowered its target share price to 1 euro from about 4 euros at the time, saying the miner’s true debt level had been understated.
Nyrstar operates global zinc smelters and mines and also produces lead in concentrate and as a refined market product. It has interests in precious metals.
Swiss-based global commodities trader Trafigura, through Farringford NV, is the single largest shareholder in Nyrstar with a near 21 percent stake.
A spokeswoman for Trafigura declined to comment.
“Trafigura has a vested interest to keep the company alive for their zinc offtake agreements, but I don’t imagine they would want to carry the burden entirely by themselves ... Nyrstar will probably need a debt restructuring in combination with a share issue,” Ngotho added. (Reporting by Julia Payne and Zandi Shabalala Editing by David Holmes)