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City broker likes the look of DekelOil Share.

Cantor Fitzgerald has the stock as a buy and has set a target price of 29p

City broker Cantor Fitzgerald has praised Dekeloil Public Ltd (LON:DKL) after the palm oil producer announced it had a converted all of its outstanding capital notes into new shares.

By cancelling all of its capital notes, DekelOil told investors that it should be in a position to start paying a dividend.

The notes had a face value of €2mln and have been converted using a share price of 13.25p – around a 10% premium to Friday’s close.

The assumed £/€ exchange rate of 1.2 is also at a slight premium to the current rate of 1.15.

“The conversion of outstanding capital notes follows hard on the heels of the buyout of the remaining minority in DekelOil’s core asset,” explains Cantor’s Adam Forsyth.

“These moves pave the way for a progressive dividend policy in our view and we think this will widen the appeal of the shares.”

The converting shareholders are locked in for 12 months and after that must adhere to an orderly market period of another six months.

Forsyth has the stock as a buy, with a target price of 29p.