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

 

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:

Commerce: Supermarket Inquiry Finds No Breaches By Countdown

The Commerce Commission inquiry into anti-competitive behaviour by Countdown supermarkets, alleged by former Labour Party MP Shane Jones, has found nothing to warrant prosecution, although it warns supermarkets to take care in the way they communicate... More>>

ALSO:

Crown Accounts: English Flags ‘Challenge’ To Budget Surplus

Finance Minister Bill English is warning next month’s half yearly fiscal and economic update from the Treasury may not forecast a budget surplus, saying that returning the government’s accounts to surplus in 2015 will be “a challenge”, given the decline in commodity prices and weak global inflation. More>>

ALSO:

March 2015: Netflix To Launch In Australia And New Zealand

World’s Leading Internet Television Network to Offer Original Series, Movies, Documentaries, Stand-Up Comedy Specials and TV Shows for Low Monthly Price More>>

ALSO:

Price Of Cheese (Is Up): Dairy Product Prices Fall To Five-Year Low

Dairy product prices fell in the latest GlobalDairyTrade auction to the lowest level in more than five years, led by declines in rennet casein and skim milk powder. More>>

ALSO:

Gordon Campbell: On The Australians Scoring Trade Points Against Us With The Chinese

It hasn’t been a great year for Trade Minister Tim Groser... To top it off, Australia has just signed a FTA with China that has far better provisions on dairy exports than what New Zealand currently enjoys in our own FTA with China. More>>

ALSO:

Iwi & Local Consultation: Oil And Gas Block Offer 2015 Begins

Energy and Resources Minister Simon Bridges today announced the start of the Block Offer 2015 process for awarding oil and gas exploration permits. More>>

Industrial Action: Stats NZ Throwing Public Money Away Duplicating Data

The Public Service Association (PSA) says Statistics NZ are throwing money away by collecting the same data twice for official statistics such as the Consumer Price Index... As part of the ongoing industrial action, field interviewers who are PSA members are continuing to collect data, but are not sending it through to Statistics NZ. More>>

ALSO:

Other Stats:

Space: Rosetta's 'Philae' Makes Historic First Landing On A Comet

After more than a decade traveling through space, a robotic lander built by the European Space Agency has made the first-ever soft landing of a spacecraft on a comet. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

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