Fletcher Building moves to patch up finances

Galtero Lara
Abril 17, 2018

But until now it seemed like its horizonal infrastructure division - roads and the like - was trucking along fine.

Fletcher said it has also obtained a new $500 million standby facility that runs until at least January 2020 with ANZ Bank, Mitsubishi UFJ Financial Group and Westpac Banking Corp, and has obtained commitments "from the required majority of lenders to a permanent solution of the current breach under the syndicated facility agreement".

"While work remains to be done to complete the strategic review, the key principles have been approved by the board", the company said. "It's essential we cut through this and as such we'll focus our activities on Australia and New Zealand going forward". The standby facility may only be used to repay holders of its $1.1 billion of notes in the U.S. private placement market. "Reducing our net debt also provides us with the opportunity to undertake divestment processes for Formica and the Roof Tile Group on terms that should maximize shareholder returns".

These holders have yet to agree to new terms following the covenant breaches.

Discussions with noteholders in the USPP market "are ongoing and Fletcher's objective and expectation is that it will achieve a mutually acceptable outcome", it said.

Although it doesn't expect to need the new standby facility, it and the rights issue proceeds are sufficient to redeem all its USPP notes and to cover any associated costs.

More news: Rusev Back In Casket Match Against Undertaker at Greatest Royal Rumble

Fletcher's reconfigured capital structure had provided a "permanent solution" to the firm's breaches of its syndicated lenders agreement and it expected to wrap up its negotiations with it's USA lenders by May 31, Taylor told media.

Following the share offer, Fletcher said it expects normalised leverage to reduce to 1.6 times, at the lower end of the company's revised target range of 1.5 times to 2.5 times, it said.

Chief executive Ross Taylor said the firm was streamlining businesses as it attempts to reset its strategy after bungling the country's biggest construction boom in living memory with a series of cost blow outs in its commercial construction unit.

Fletcher says there is no change to its estimated operating loss for B+I of $660m in the year ending June, or for its forecast of earnings before interest and tax (ebit) of $680-720m excluding the B+I loss.

"The offer will comprise institutional and retail entitlement offers, with any entitlements that are not taken up by eligible shareholders and entitlements of ineligible shareholders being offered for sale in the institutional and retail book builds respectively", it said.

Otros informes por

Discuta este artículo