Option clears path to exit Aratere financing
Option agreement clears path to exit Aratere financing
Auckland-New Zealand. Tranz Rail Holdings Limited [NZX: TRH] today announced that it had signed an option agreement relating to the Aratere ferry finance lease. The option will enable the company to pay off the existing financiers of that lease on terms that involve very small break costs and are thus very favourable to the company.
Tranz Rail Board Chairman Wayne Walden says that an agreement has been reached with the debt and equity holders of the Aratere lease as to the price at which the company can exit its current financing arrangements with them.
If the option is exercised, Tranz Rail will take ownership of the Aratere which will open up the full range of options for fleet configuration going forward. It will also enable the company to realise up to $10 million in foreign exchange gains.
"The debt party comprises four United States based financiers while the equity party is Citigroup, based in New York.
"This is certainly a very positive result which gives the company the option to exit this financing on terms which are very attractive for Tranz Rail. An exit from this lease is an important pre-requisite for an overall refinancing of the company on a long term less onerous basis. Former Chief Financial Officer Wayne Collins led this transaction for us and has created a great outcome for the company." says Mr Walden.