capital raising, page-23

If you do the numbers on this stock it looks pretty fully priced to me.

For comparison Ironbridge recently sold easternwell to transfield for $575m on foward EBITDA of $76m. Thats a EV multiple of 7.5. RQL is trading on about 8.5 and it is a smaller less diversifed and less resourced (well connected) company with high capex needs over the next 2 years (at least).

There are REAL risks that the company fails to execute in a competitive environment and that the company over capitalises and dilutes resulting in low EPS. I would have preferred the company to grow-slow using cash form operations and options.

With the recent cap raising we are likely to see people taking up the SPP and selling down so expect an overhang.