August 06, 2012
Drillers & Dealers magazine recently asked Janan Paskaran, “What new challenges are (your) clients currently facing and seeking advice on?”
Janan Paskaran: The biggest challenge facing the majority of our clients is the availability of funding. The equity markets have been very quiet this year, and the continued instability in Europe has made it difficult for many issuers to access capital. While companies with production may be able to access debt markets, exploration companies are struggling to find sources of funding. Private equity capital is available, though it is being selectively deployed, and issuers have to accept the terms they are getting for this type of funding. Many issuers feel, and perhaps rightfully so, that their implied valuation is low in relation to their net asset value, and the thought of securing funding at these levels is unpalatable. However, they may need to face the reality that they have no choice but to secure funding at these levels, as there are relatively few viable alternatives.
Read the full article here (page 54).