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

 

Wine: 20% Of Marlborough Storage Tanks Damaged By Quake

An estimated 20 percent of wine storage tanks in the Marlborough region, the country’s largest wine producing area, have been damaged by the impact of the recent Kaikoura earthquake. More>>

ALSO:

ACC: Levy Recommendations For 2017 – 2019 Period

• For car owners, a 13% reduction in the average Motor Vehicle levy • For businesses, a 10% reduction in the average Work levy, and changes to workplace safety incentive products • For employees, due to an increase in claims volumes and costs, a 3% increase in the Earners’ levy. More>>

Women's Affairs: Government Accepts Recommendations On Pay Equity

The Government will update the Equal Pay Act and amend the Employment Relations Act to implement recommendations of the Joint Working Group on Pay Equity. More>>

ALSO:

Immigration: Increase In Seasonal Workers For RSE

The current cap will be increased by 1,000 from 9,500 to 10,500 RSE workers for the 2016-17 season. Mr Woodhouse says the horticulture and viticulture industry is New Zealand’s fourth largest export industry, producing almost $5 billion in exports. More>>

ALSO:

Hurunui: Crown Irrigation Invests Up To $3.4m In North Canterbury

Crown Irrigation Investments will invest up to $3.4m in the Hurunui Water Project, an irrigation scheme that will be capable of irrigating up to 21,000 hectares on the south side of the Hurunui River in North Canterbury. More>>

ALSO:

Not So Great:Butterfly Eradication Success

The invasive pest great white butterfly has been eradicated from New Zealand in a world-first achievement, Primary Industries Minister Nathan Guy and Conservation Minister Maggie Barry say. More>>

Gordon Campbell: On The Government’s Tax Cuts Fixation

Long before the earthquake hit, the dodginess of the government tax cuts programnme was evident in the language of its packaging. It is being touted as a “tax cuts and family care” package... More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news