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Linc Energy Limited
Vote of Confidence - Marubeni Invests US$5M in LNC
LNC A$0.67
BUY
9 October 2007 S&P/ASX 200 20 July 2007 XJO Jeremy Tobias
+612 9226 0086
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BBY maintains its BUY recommendation on Linc Energy Limited (LNC) after the company announced that Marubeni Coal Pty Limited (a wholly owned subsidiary of Marubeni Corporation) has agreed to take a placement of US$5M (A$5.6M) in the company at a price of A$0.76/sh for 7.37M shares. This is a positive development for LNC. It is a vote of approval in the company's business model and operations. It gives BBY further confidence that the existing MOU between Marubeni and LNC will shortly be turned into a definitive agreement. As a result we have increased our 12 month price target to A$1.00/sh (prev A$0.90/sh) and slightly lowered our DCF valuation to A$1.51/sh (prev A$1.52/sh) to take into effect the small dilution from the equity investment.Key take-outs from the Marubeni Investment