Asciano abandons plans to sell assets to private equity, opting instead to raise equity by selling new shares
Asciano has abandoned its decision to sell off its assets to four private equity groups, opting instead to raise equity by selling $2 billion in new shares.
The rescue package is underwritten by investment banking and asset management firm UBS.
Asciano is currently on a trading halt and shares will be sold at $1.10 each — 40 percent less than current prices.
Asciano Chairman Tim Poole says the company is in a fortunate position of having “a number of alternative” proposals on the table and it has been decided the share sale is the best suited to the company.
“The decision to raise new equity was made only after considering the full range of factors,” Poole says.
“The board of Asciano believes that this transaction represents the best overall outcome for security holders. It also provides the platform for Asciano to undertake a comprehensive restructuring of its capital base.”
The only thing standing in the way of package becoming a reality is the support of shareholders, which according to Chief Executive Mark Rowsthorn will not be an issue.
Asciano currently has a net debt close to $5 billion of which over $2.5 billion is due for repayment in the next financial year.
The company is pinning its hopes on the success of its Pacific National Queensland coal and grain haulage business, with Asciano saying its profits have increased by $19 million and will continue to grow.
While the long running saga seems to becoming to a head, the latest headache for the company is now their Pacific National presence in Tasmania, which Asciano is looking to offload for close to $17 million.
However, Rowsthorn says there are currently no interested buyers.
Talks between the company and the Tasmanian government are ongoing and Rowsthorn maintains the venture remains important to Asciano and he has his “fingers crossed” for a resolution.