Fletcher Building gets $345M additional debt facilities

Fletcher Building gets $345M additional debt facilities from 3 existing syndicate banks

By Jonathan Underhill

Sept. 8 (BusinessDesk) - Fletcher Building, whose leverage almost doubled in 2017, said it has arranged an additional $345 million of debt facilities with three banks in its existing syndicate.

The construction and building products group said the new facilities were "in line with Fletcher Building’s scheduled refinancing programme, and will allow the company to work with its lenders to access longer term funding solutions."

Chief financial officer Bevan McKenzie said the new facilities show the company continues to have the support of lenders ANZ Bank New Zealand, Hongkong and Shanghai Banking Corp and Westpac Banking Corp.

The group’s leverage rose to 2.7 times as at June 30, from 1.6 times at the end of the 2016 financial year. Interest coverage fell to 4.7 times from 5.9 times a year earlier. Of its $2.67 billion of total available funding as at June 30, $536 million was undrawn. In announcing its results last month, Fletcher said that while leverage at balance date was outside the target range of 2–2.5 times, "the expectation is that this will return to within the range in 2018." The company stayed within its banking covenants.

The other members of Fletcher's existing syndicate are Bank of Tokyo-Mitsubishi UFJ, Bank of New Zealand, Commonwealth Bank of Australia and Citibank.

Fletcher's net profit dropped 80 percent to $94 million in 2017 after the company took impairments of $206 million its Tradelink and Iplex Australia businesses. Operating earnings fell 23 percent, in line with a profit warning in July, reflecting losses on two major building projects.

The shares were unchanged at $8.23, and have dropped 22 percent so far this year.

(BusinessDesk)

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