AIO 0.00% $9.13 asciano limited

asciano secures debt breathing space

  1. 111 Posts.
    Asciano secures debt breathing space
    December 22, 2009

    PORTS operator Asciano has renegotiated its $5 billion debt, paying down $2.25 billion due in six months, with no repayments now due until May 2012.

    But the debt-laden company, which this year staved off collapse via a controversial capital raising, has disappointed investors by failing to restore a dividend.

    Under the revised debt structure, Asciano cleared the air surrounding the $2.25 billion debt due to mature in May, paying it back using money raised in the capital raising as well as available cash.

    In its place, it took on a new $1.1 billion in four and five-year facilities, with $640 million maturing in December 2013, and a $500 million term-loan facility maturing in December 2014. Total drawn debt is now $2.9 billion, with a limit of $3.4 billion.

    "This company is now transformed from what they call an infrastructure business, which was very much yield-driven . . . more into this standard industrial company," said JPMorgan analyst Matt Crowe. "Investors want to see it pay normal dividends, not inflated dividends but just a normal payout ratio."

    It is believed Asciano secured terms at 300 basis points above the bank bill rate from its banking syndicate, which includes the big four and Royal Bank of Scotland.

    Asciano managing director Mark Rowsthorn said it had $332 million in cash and access to a further $500 million in undrawn facilities, giving it "significant financial flexibility to pursue our strategy".

    But there was disappointment over the failure to reintroduce a dividend, with Asciano preferring to focus on investment in its Queensland Pacific National coal business and the uncertainty of the economic environment.

    Asciano shares fell 3.5 to $1.735.
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