Canning Vale, Australia-based Ausdrill Limited (ASX: ASL), established in 1987, is a diversified metals and mining sector company, with operations across Australia, Africa, the United Kingdom as well as India. The company offers services throughout the lifecycle of an asset from exploration, manufacturing of drill rigs, mine development, surface mining and further underground mining, mineral analysis, procurement and logistics.
Source: Company’s Website
On 22nd May 2019, Ausdrill announced to the market that its earthmoving parts and equipment subsidiary, BTP, had been awarded a three-year extension worth $126 million to its existing contract with Peabody Australia. BTP has been working as a key partner with Peabody since April 2015 and would keep on renting mining and ancillary equipment to coal mines owned by Peabody located in the Hunter Valley and Bowen Basin regions, under the contract.
The new three-year contract service was effective from 1st April 2019, with Peabody having an option to extend this by a further two years. Peabody is a leading global pure-play coal company serving power and steel clients in over 25 countries located across six continents.
Commenting on the new development, Ausdrill Managing Director, Mark Norwell quoted, “We are delighted to have been awarded this contract extension and look forward to continuing to provide equipment and related services to Peabody, building on the strong relationship BTP has formed with Peabody over many years.”
Recently, the diversified mining company Ausdrill informed the stakeholders that it had decided to not proceed with the previously announced offering of Guaranteed Senior Notes (US Notes) by its wholly-owned subsidiary Ausdrill Finance Pty Ltd.
According to the company’s CFO, Peter Bryant, it was no longer attractive to proceed with the refinancing amidst a weakening in market conditions with the escalation in the US-China trade war and the sharp decline in the US equity markets.
As a result of the above, Barminco Finance Pty Limited, a wholly-owned, indirect subsidiary of Ausdrill, would rescind the notice of redemption with respect to its USD350 million 6.625% Senior Secured Notes due 2022 and, accordingly, shall not redeem such notes as set forth in its notice of redemption dated 2nd May 2019.
This follows the recent refinancing of the company’s revolving credit facilities in April 2019, with an aggregate limit of AUD 300 million along with a term extension of maturity date by ~4 years to 1st July 2023. An interest rate lower than the existing facilities was agreed upon, and the facilities have been provided by Standard Chartered Bank, Caterpillar Finance, Nedbank, Goldman Sachs, Deutsche Bank and HSBC. This reflects strong support from financiers and the company’s active credit profile.
Ausdrill recorded a growth of 45.6% in its total revenues for the half-year to 31st December 2018 (1H FY19). More on this can be read here.
With a market capitalisation of around AUD1.05 billion and ~ 685.68 million outstanding shares, the ASL stock closed the trading session, at a price of AUD 1.510, down by 1.307% by AUD 0.020 from its previous close, with ~4.11million shares traded (as on 23rd May 2019). ASL’s stock has given a positive YTD return of 35.40%. In addition, the company has an annual dividend yield of 3.27%.
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