From today's West Australian (on line)
TFS secures $US250m refinancing deal
Brad Thompson - The West Australian on July 21, 2016, 9:53 am
TFS Corporation chief executive Frank Wilson. Picture: AAP.
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Indian sandalwood grower TFS has secured a $US250 million refinancing deal which comes with a more favourable interest rate.
Perth-based TFS said the deal lowered the cost of debt from 11 per cent to 8.75 per cent and provided an extra $US50 million in working capital.
The new secured note offering extends the debt maturity date by five years to 2023 when the company expects to harvest some of its most promising sandalwood plantations in northern Australia.
It is being hailed as the first Australian corporate deal of its kind in the US market since Brexit. Settlement is expected to occur in New York on July 27.
TFS managing director Frank Wilson said the note issue significantly strengthened its financial position.
“We have successfully extended our debt maturity profile and significantly reduced our cost of debt with no maintenance covenants on our debt,” he said.
“The new notes mature in 2023, which is aligned with the timing of our larger harvests.”
Mr Wilson said the refinancing deal would result in the early repayment of in full of $US200 of debt due to mature in 2018.
Moody’s recently upgraded its credit rating for TFS as the company prepares for bigger harvests.
Last month, TFS announced it had finalised a $27 million sale of land and plantations to an unnamed US institutional investor. The sale, approved by the Foreign Investment Review Board, included freehold land in the Northern Territory.
TFS shares were up three cents, or 1.99 per cent, to $1.54 at 9.50am.
