And Transfield Services and its 47.5% owned associate, Transfield Infrastructure Fund, also revealed a big move on budget day with the news of a capital raising and asset sale designed to raise $300 million.
Under the move, $110 million will be sought from shareholders, with Transfield Services (TSE) putting its hand up for around $53 million, including a $29 million sub-underwriting.
And New Zealand state-owned Meridian Energy has bought the Mt Millar wind farm in South Australia from Transfield Infrastructure Fund (TSI) for $191 million.
The sale was a key element of a capital restructure announced by Transfield yesterday.
Transfield said in the statement the sale price for the windfarm represented more than 13 times financial year 2010 forecast normalised earnings before interest, taxes, depreciation, and amortization (EBITDA) attributable to the farm.
Transfield also is undertaking a share offer to raise $110 million in new capital for the fund, and will extend the fund’s debt maturity from 2011 to 2015.
Transfield Infrastructure Fund said the $110 million capital raising would offer new securities at 70 cents, compared with the security’s last sale price of 90 cents before it entered a trading halt on Tuesday.
That’s a discount of 22%, rather steep and a sign perhaps that the infrastructure fund needs the cash to help its recapitalisation, and to assure its banks.
The fund said the offering was supported by major security-holder, Transfield Services Ltd.
The capital raising includes a placement to institutional investors worth about $30 million, and an accelerated non-renounceable pro-rata entitlement offer to raise about $80 million (which TSE will partly sub-underwrite). TSE’s stake could fall to around 43% if the issue sees a 50% take-up rate.
The capital raising and sale of the wind farm will help cut the fund’s pro-forma corporate-level net debt from the December 31, 2009 level of $728 million to $465 million.
That’s a fall of 36%.
Transfield Infrastructure said it would extend its debt maturity from September 2011 to May 2015, with the facility limit reducing to $425 million by June 2015.
The company was forecasting a $39.5 million net loss for FY10 on EBITDA of $75 million.
The fund’s securities were in a trading halt yesterday while the capital raising takes place.
Transfield Services said that there would be little impact on its finances.
"TSE confirms that it will incur a one-off after tax equity accounting cost of an estimated $22 million ($16 million non-cash) from TSE’s pro-rata share of TSI’s sale of the Mt Millar Wind Farm, interest rate swap break costs and other transaction costs.
"This assumes a 50% take-up of the Retail Offer.
"Excluding the net impact of this one-off cost, the Company maintains its FY10 guidance. This one-off cost will also not impact TSE’s ability to pay dividends or materially impact full year gearing targets."
Transfield Services shares fell 6c to $3.96 after jumping 18c on Monday to $4.02.
And the fate of Transurban, the big toll road group, could be known by as early as 10 am today after it was reported to have received a proposed multi-billion dollar takeover bid from its three main shareholders.
The three shareholders met the company late in the day to protest at the share issue that will cut their combined 42% stake while raising new equity to finance the $635 million purchase of the Lane Cove Tunnel in Sydney.
After refusing to take part in a $542 million fund-raising (which would see their combined holding cut to 38%) the three groups – the Canadian Pension Plan Investment Board, the Ontario Teachers Pension Plan Board and Sydney group, CP2 – reportedly countered with a $5.57-a-share take-it-or-leave it offer.
The two Canadian groups had bid $5.25 last November, so the price is only 32c higher.
The new offer values Transurban’s combined equity and debt at $13.8 billion and could lead to the country’s largest toll-road company being taken private by the investors in a 40-40-20 ownership split reflecting their financing of the bid.
In Sydney, Transurban operates the Westlink M7, Hills M2, Eastern Distributor and the M5 Motorway.
The $7 billion funding would be provided primarily by the Canadians with support from clients of CP2, plus $500 million of new debt that will be used to pay for the tunnel instead of the planned equity raising.
It is a condition of the new bid that Transurban abandons the fund-raising announced on Monday.
The proposed offer is 65¢ above Transurban’s last traded price of $4.92 before the shares were suspended on Monday on the announcement of the Lane Cove acquisition.
Media reports say Transurban’s equity raising is around half completed. A statement could come today.
The three groups have reportedly given the TCL board until 10 am today to give a favourable response and start formal talks to conclude an agreed deal.
Transurban last night told the media that it had received the offer and said it was "evaluating" its terms with its advisers.
The November offer lapsed after the TCL board and management opposed it.
