Asciano Raises $1.14 Billion in Debt Funding

Submitted by Jim Thesiger on 22 December, 2009 - 03:43

Asciano Group (AIO), one of the leading transportation infrastructure owners in Australia has managed to raise a new $1.14 billion worth of debt funding in an attempt to improve its balance sheet. However, the group also declared that the investors will miss out on a half-year dividend. Asciano stated in a release delivered to the Australian Securities Exchange that the company currently has no repayment obligations till May 2012. The fund secured by the group includes a $500 million worth of revolving credit facility, $140 million in working capital and $500 million term loan. According to Mark Rowsthorn, the chief executive of Asciano, the transportation infrastructure owner currently has $332 million in cash and $514 million in undrawn debt facilities on the balance sheet to finance the expansions.

Mr. Rowsthorn expressed his satisfaction regarding the support Asciano received from the bank syndicate and also said that the raised funds will help the company to expand its coal haulage operation in the Hunter Valley and Queensland. He also added that the company managed to deliver the commitment to the investors to refinance Asciano’s debt facilities. It is to be mentioned that the refinancing agreement incorporated revisions to financial covenants which were believed to include lower maximum gearing levels as calculated by net debt to earnings before interest, tax, depreciation and amortisation (EBITDA). Previously, the maximum gearing ratio was fixed approximately at 7.5 times EBITDA.

The Asciano chief executive said that before Asciano’s next debt repayment was due in May 2012, his company has plans to go for diversifying the funding and stretching the debt maturity profile and the company is not going to pay interim distribution during the first half of the financial year. According to him, the decision reflects the latest economic vulnerability, company’s strategy of concentrating on the Pacific National coal operations in Queensland and debt reform.