Refining NZ plans $75M note offer
By Gavin Evans
Nov. 20 (BusinessDesk) - Refining NZ plans to raise up to $75 million through a 15-year note offer to reduce its bank debt and extend the maturity of its borrowings.
The company, operator of the country’s only oil refinery, says the issue will diversify its funding options and give it greater flexibility when planning projects.
Marsden Point produces about 70 percent of the petrol, diesel and jet fuel used here. It is 43 percent-owned by Z Energy, BP and Mobil, and charges those customers processing fees based on refining margins in Singapore.
That requires the company to keep investing to ensure the plant remains competitive against larger, more modern plants in Asia that its customers can also buy fuel from.
The company completed a major upgrade of its petrol-making capability through the $425 million Te Mahi Hou project in 2015, and in June completed a $107 million, one-in-15 years maintenance shutdown.
Bank debt stood at $272 million at June 30.
Smaller projects underway include work to increase the capacity of its fuel pipeline to Auckland, the addition of jet fuel storage at Marsden Point, and an upgrade of the site’s sulphur-making capability. The company is also planning for a $30 million-plus dredging of the Whangarei harbour mouth to reduce tanker traffic by enabling larger vessels to visit fully-laden.
The interest rate on the unsecured, subordinated notes for the initial five years is expected to set by a book-build and be announced by Nov. 29. Subsequent rates will be set through an election process.
First NZ Capital is arranging the offer which will open Nov. 30. ANZ, BNZ and Forsyth Barr are the joint lead managers.