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

 

Bad Day For Rope: Donaghys Job Losses Another Blow To Dunedin

The loss of 30 jobs from Donaghys rope and twine factory is yet another blow to the people and economy of Dunedin, says Dunedin South Labour MP Clare Curran. More>>

ALSO:

Oil: 2014 New Zealand Petroleum Summit

Simon Bridges: Our abundance of energy and minerals resources provides us with unique opportunities to build the New Zealand economy.

Over the past three years the Government has made significant changes to how the sector is regulated. More>>

ALSO:

WWF Report: Solutions In Reach; World Biodiversity Suffers Major Decline

Global wildlife populations have declined by more than half in just 40 years as measured in WWF's Living Planet Report 2014. Wildlife's continued decline highlights the need for sustainable solutions to heal the planet... More>>

ALSO:

Scoop Business: NZ Dollar Catches Breath After "Goldilocks" Slump

The New Zealand dollar edged up following its dramatic slump yesterday after the Reserve Bank confirmed speculation it intervened in the currency market last month and PM John Key suggested a “Goldilocks” level far lower than at present. More>>

ALSO:

Biosecurity: Kiwifruit Claim To Hold Officials Accountable For Psa

Kiwifruit growers have joined forces to hold Biosecurity NZ accountable in the courts for its negligence in allowing 2010’s Psa outbreak that devastated New Zealand’s kiwifruit industry and exports. Foundation claimants representing well ... More>>

ALSO:

Poison: Anglers Advised Not To Eat Trout In 1080 Areas

With the fishing season opening in just a few days (1 October 2014), anglers are being warned by the Department of Conservation(DOC) not to eat trout from pristine backcountry waters and their downstream catchments, where the department is conducting 1080 poisoning operations. More>>.

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand

Mosh Social Media
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news