On Monday, Ausdrill Limited (ASX: ASL) confirmed its fundraising plans via a potential notes issue as claimed in the media article. This is in reference to the report published in the Street Talk section of The Australian Financial Review claiming that Ausdrill has advanced its preparation for a potential issue of United States dollar-denominated notes that could be worth $500 million.
However, Ausdrill stated while it is considering the potential issue of Notes, no specific decision has yet been made and any decision is subject to Board approval, taking into account market and other conditions.
The media report highlighted its understanding of ongoing preparation by Ausdrill to hire ‘a bunch of advisers’. It further claimed that Ausdrill’s decision to raise fresh fund underscores its requirement to refinance some existing debt.
Ausdrill further assured the market that it would keep them updated if a final decision is made to proceed with an issue of Notes.
For further clarity, Ausdrill stated that “this announcement does not constitute an offer to sell, or the solicitation of any offer to buy, any Notes or other securities. Any offer of Notes, if made, would be made only by means of a private offering circular. The Notes would not be registered under the United States Securities Act of 1933, as amended, or the securities laws of Australia or any other jurisdiction. Any Notes to be offered may not be offered or sold in the United States without registration under the United States Securities Act or an applicable exemption from such registration requirements.”
This news follows the recent refinancing of $300 million revolving credit facilities of Ausdrill. The new facilities, provided on a bilateral basis by Standard Chartered Bank, HSBC, Caterpillar Finance, Nedbank, Deutsche Bank and Goldman Sachs, reportedly maintain an aggregate limit of A$300 million with the term extended by approximately 4 years.
Ausdrill Chief Financial Officer, Peter Bryant expressed that the facilities enable Ausdrill to capitalise on growth opportunities in new markets while maintaining the significant headroom and flexibility to support the Ausdrill’s expansion into adjacent services that complement its existing portfolio.
In addition, this refinancing had reportedly been secured at a lower interest rate compared to the existing facilities, demonstrating Ausdrill’s enhanced credit profile and the strong and continued support shown to Ausdrill by its financiers.
Established in Kalgoorlie in 1987, Ausdrill is an ASX-listed mining services company that operates across Africa, India, Australia, and the United Kingdom. It is positioned as a leader in underground contract mining, drill & blast, exploration, diamond drilling, and mineral analysis.
ASL stock price surged up by 1.524% to last trade at $1.665 on 29 April 2019. The stock closed at a Price to Earnings multiple of 3.400x with a market capitalisation of $1.12 billion. Over the past 12 months, the stock has declined by 38.23% despite a positive price momentum of attractive 27.63% recorded in the past three months.
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