Galaxy Resources Ltd

Secured offtake contracts for 100% Mt Cattlin output: Galaxy Resources Ltd (ASX: GXY) got investors’ thumps-up with an 8.6% stock price rise on November 29, 2017, as the group updated about executing binding long-term offtake contracts with multiple customers throughout Asia for Mt Cattlin. Galaxy’s wholly owned subsidiary, Galaxy Lithium Australia, is set to sell 100% of the planned production of lithium concentrate from Mt Cattlin for 5 years beginning in 2018. Pricing is on either a CIF (cost plus insurance and freight) or CFR (cost plus freight) basis and will be subject to an annual pricing review between the Company and its customers in Q4 of each calendar year. The parties, which are said to be leading producers of lithium carbonate and lithium hydroxide mono-hydrate, have agreed the pricing for FY18. With this news, the stock just peaked towards its 52-week high price and is good to hold.
 

Slater & Gordon Ltd

Recapitalisation or Solvency- Slater and Gordon Ltd (ASX: SGH) witnessed a higher than usual trading volumes and saw its stock plunging 23% on November 29, 2017. This was noted following the announcement on recapitalisation wherein the senior lenders unanimously approved the proposed senior lender creditors’ scheme of arrangement. Under the recapitalisation scheme, SGH had proposed to undertake a 100-for-1 share consolidation prior to implementing the recapitalisation to reduce the current share capital from 347.2 million shares to 3.5 million shares on issue. Thus, as anticipated earlier, the shareholders’ interests will be diluted to 5% of the Company’s total share capital (post-Recapitalisation and post-share consolidation). After facing multifarious challenges, SGH had highlighted recapitalisation to be the best bet for shareholders and all stakeholders, and in case of disapproval the company might re-assess the solvency considering the mounting debt. The company is thus encouraging shareholders to vote in favour of the recapitalisation resolution at the upcoming AGM.

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