Virgin Australia has stepped up its money finding efforts, asking for trading in its shares to be suspended as it works on a restructuring plan and awaits any news from Canberra about a $1.4 billion bailout package from the Federal Government.
The airline on Tuesday put its shares in a two-day trading halt, and yesterday followed up by asking the ASX to suspend its shares for seven days or until it makes an announcement about its survival plans.
“These discussions have continued over the last two days including discussions which remain confidential and are incomplete,” Virgin said in a statement to the ASX.
“The company is not presently in a position to make an announcement to the market with respect to these matters.”
The airline has brought in American investment bank Houlihan Lokey to try to restructure its $5 billion debt and has Deloitte looking at potential restructuring options, which could include going into voluntary administration.
Automotive parts retailer Bapcor has joined the still growing line of companies looking for new capital to help defend itself in the current retail freeze.
The company yesterday revealed it is looking to raise $180 million in a fully underwritten instructional placement. The new securities will be issued at $4.40, an 8.5% discount to where the company’s shares last traded on Wednesday.
The company said that it had pro forma net debt as at 31 December 2019 of $226 million.
That had blown out to more than $429 million of net debt at March 31 this year. After the placement, that will be reduced on a pro forma basis to $252 million, including $231m million of cash. Additional proceeds are expected to be raised via the non-underwritten share purchase plan.
Separately, Bapcor announced it will launch a non-underwritten share purchase plan to small shareholders looking for up to to $30 million.
The company said the proceeds of the capital raising will be used to reduce its net debt position and gearing.
The company also provided a trading update alongside the capital raising, noting conditions in late March and early April have deteriorated sharply.
“Trading and operating results remained in line with management expectations across January and February 2020 with year to date revenue to February 2020 growing 12.7% on the same period in 2018-19.”
“In March 2020, Bapcor’s Australian businesses continued to perform solidly with revenue increasing 15.6% albeit with trading conditions deteriorating towards the end of March and into April.
“Bapcor New Zealand’s revenue declined 16.1% in March 2020 as a result of store closures and the impact on customer demand of more extensive lockdown measures. Gross margins have, and continue to, remain stable across all business segments.
“Currently all stores remain open, except for New Zealand where Bapcor has elected to close approximately two-thirds of its stores which are not required to service current customer needs during the stringent government restrictions,” the company said yesterday.
Crown Resorts has secured more than $1 billion in fresh debt to help to survive the complete shutdown of its casino and hotel operations during the coronavirus pandemic.
The company said on Thursday said it had taken on $560 million in new debt from relationship banks, as well as a $460 million project finance facility to support the building of its new hotel and casino at Barangaroo in Sydney.
Crown CEO Ken Barton said the new debt “should enable us to weather the storm caused by the COVID-19 pandemic”.
“We will continue with the construction of Crown Sydney which remains on track for completion progressively from the end of this year, absent any further impact relating to COVID-19,” he said. “As a result of today’s announcement, Crown is well placed to withstand an extended period of closure”.
Crown has stood down around 95% of its 11,500 employees. The company said it will still pay its half-year 30 cents a share interim dividend today. That will cost the company more than $203 million.
Crown said it currently had around $500 million in cash on hand.
Crown shares rose 0.4% to $8.30.
Meanwhile the country’s other major casino operator, Star Entertainment Group said on Thursday that it had also has secured additional loan facilities and announced more cost-cutting measures to help it survive the temporary shuttering of its premises.
The company announced it has secured an additional debt funding facility with its banks for $200 million over a 12-month period.
Including the new facility, it said it has available cash and undrawn debt facilities of around $700 million.
It also announced its debt covenants have been waived for the next testing date of June 30, subject to the company not paying a cash dividend until gearing is below 2.5 times.
The Star also announced reduced capital expenditure in the current and next financial year along with a reduction in senior management remuneration for the remainder of the 2020 financial year.
“These unprecedented challenges have had a considerable human impact. To temporarily stand down more than 90% of our dedicated workforce will be the most painful decision our senior management is ever likely to encounter,” Star chairman John O’Neill said. “As a Board, and as a management team, there was no hesitation in reducing directors’ fees and senior executive salaries.”
Star shares jumped more than 9% yesterday to end at $2.56
