Three things you need to know in the financial markets this morning from investment writer, Tony Cross.
Reckitt Benckiser [LON:RKT] has this morning announced that it is to sell its Chinese infant formula business for $2.2 billion, with proceeds of around $1.3 billion expected. Shareholders hoping for a quick windfall here are however set to be disappointed, with the money instead being used to pay down debt. The company notes that it remains committed to the Chinese market, but it seems that this division was being subject to market forces that at times skewed growth and margin profiles.
88 Energy [LON:88E] has this morning announced the issue of fresh equity to fund the acquisition of the remainder of Project Peregrine on Alaska’s North Slope. The partial holding the company had until now left it liable to exploration delays, but the 100% ownership ensures that progress can resume next winter. Shareholder reaction to the news will be closely followed during the session.
More small cap resource stock news with Alien Metals [LON:UFO] announcing final results from the maiden drilling program on its Hancock Iron Ore project in Western Australia. The tone of the note is certainly very upbeat with results being heralded as excellent and the company adding that there’s still much more to explore. Shareholder reaction will again be interesting to watch, although if there are early gains (that seems likely), the test will be whether they can be consolidated as the week progresses.
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