Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Airport expects no credit rating impact from capital return

Auckland Airport expects no credit rating impact from raising debt to return capital

Nov. 28 (BusinessDesk) – Auckland International Airport, the second largest company on the NZX 50 Index by market value, expects to maintain its credit rating while taking on debt to part fund a $454 million capital return to shareholders, says chief financial officer Simon Robertson.

The nation’s busiest gateway plans to shrink its shares on issue to 1.19 billion from 1.32 billion via a one-in 10 share cancellation at $3.43 a share. At that price, the company’s ratio of debt to enterprise value would rise to 28.1 percent from 20.1 percent, it said. The shares rose 1.3 percent to $3.46 on the NZX today and have climbed 28 percent this year.

Auckland Airport’s A-minus rating with Standard & Poor’s is the highest for any airport in Australasia, alongside Melbourne Airport. The rating has been on positive outlook since September last year and Robertson said he expects that to be reviewed back to neutral, given the transaction.

“We have significant headroom for what is appropriate for a rating of A-minus,” he told BusinessDesk.

The airport had looked hard at its future capital spending requirements, including up to $130 million in the 2014 financial year, and was satisfied the capital return wouldn’t harm its growth aspirations, he said.

The company had $69 million of cash and cash equivalents on its balance sheet as at June 30, though since then has paid out a final dividend. Cash will have built up again by April next year, when the capital return is planned, though funding will be predominantly from new debt, Robertson said.

The return is effectively tax free, subject to a shareholder’s personal circumstances, because the Inland Revenue Department is satisfied that an amount equal to its available subscribed capital, or $181.6 million, isn’t in lieu of a dividend, and the remaining $272.4 million will be deemed a dividend for tax purposes and fully imputed at the 28 percent company tax rate.

Because of the capital return, the airport won’t pay an interim dividend for the 2014 year. To fund the bulk of the return, the airport will put in place new short-term bank facilities, which will later be replaced by long-term funding.

Robertson said the final refinancing would be targeting an average maturity of more than seven years, pushing out the overall weighted average maturity profile of the company’s debt, which stood at 4.21 years as at June 30. Net cash flow from operating activities was $207.8 million last year.

The transaction requires approval of at least 75 percent of voting shareholders and the company would then seek final High Court clearance in March, with the return of capital aimed for mid-April, it said in a statement.

(BusinessDesk)


© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Balance Of Trade: NZ Posts Trade Deficit In October On Falling Dairy Exports

New Zealand’s posted its largest monthly trade deficit for October in six years, while narrowing the shortfall from September, led by a fall in dairy exports to China while all main imports into the country rose. More>>

ALSO:

Gigatown Winner: Plenty Of Positives For Dunedin

Although the city has taken the Gigatown title, along with new ultrafast 1Gbps broadband and funding for $700,000 worth of UFB-related initiatives across the community, Mr Cull says Dunedin has gained so much more through its involvement. More>>

ALSO:

R18: The Warehouse Group Praised For Removing Games

The decision by New Zealand’s largest retailer The Warehouse Group (TW Group), to withdraw stocks of the latest version of Grand Theft Auto V (GTA V) and other R18 games, has been praised by advocacy group Stop Demand Foundation. More>>

ALSO:

Air NZ Wine Awards: Victory For Villa Maria As Pinot Noir Thrills

It was a night to remember as Villa Maria Estate picked up one of the highest accolades of the evening, the O-I New Zealand Reserve Wine of the Show Trophy, at the 28th Air New Zealand Wine Awards. The Villa Maria Single Vineyard Southern Clays Marlborough ... More>>

ALSO:

Future Brighter Money: RBNZ Releases New Bank Note Designs

New Zealand’s banknotes are getting brighter and better, with the Reserve Bank today unveiling more vibrant and secure banknote designs which will progressively enter circulation later next year. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news