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Tranz Rail Requests Share Trading Suspension
Tranz Rail Requests Share Trading Suspension
Tranz Rail Holdings has asked the New Zealand Stock Exchange to suspend trading in its shares while the Company negotiates the final part of its new banking arrangements. The Exchange has agreed to the request.
The request was made after the Company failed to reach agreement with Citibank, one of four members of its banking syndicate, on new arrangements for its banking facilities and lease of the Aratere interisland ferry. Agreement on both these arrangements was due on November 20.
The other three members of the banking syndicate, and the Aratere Lenders, have approved the new arrangements.
Citibank has refused to approve the arrangements unless the Company breaks its $US88 million hedge in respect of its Aratere obligations. The hedge contract is an important part of Tranz Rail’s foreign exchange risk management policy and the breaking of the contract could have material effects on the Company’s risk position and costs.
The Company has asked the Exchange to suspend trading in its shares for the rest of the day, or earlier if resolution can be reached.
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