Analysts at Berenberg reiterated their ‘buy’ rating and 270.0p target price on resource firm Tharisa on Monday after the group struck a fresh commodity offtake-based financing agreement.
Berenberg noted that terms of Tharisa’s $130.0m debt facility with Société Générale and Absa Bank, split between a $80.0m term loan and a $50.0m revolving facility, had not been disclosed, other than that they have a 42-month tenure.
However, it also said the debt facility added further financial flexibility for Tharisa, and expects the facilities to form part of the funding for its Karo PGM project in Zimbabwe, and minimise risk of equity issuance.
“We view the debt facility as a small positive for the shares,” said the German bank. “We value Tharisa at 266.0p per share on a net asset value basis (0.36x), while, on an enterprise value/EBITDA basis, the shares are trading at 3.0x full-year 2023E EBITDA, versus a trailing three-year average of 3.5x. Using a blend of 1x NAV and 4.0x 12-month forward EBITDA, we reach a price target of 270.0p.”
Reporting by Iain Gilbert at Sharecast.com
