Ausdrill launches $100m raising

Mining services business Ausdrill has launched a $100 million capital raising to bolster its balance sheet, as it anticipates further growth in its African operations, and negotiated an expanded debt facility.

Perth-based Ausdrill said it would place 46.8 million shares at $2.14 each to raise $100.2 million, with the price representing a 5.3 per cent discount to the company’s five-day volume-weighted average price.

The company has also refinanced and upsized its revolving debt facility from $125 million to $200 million, which has been provided by HSBC, Standard Chartered Bank, CAT Finance, BNP Paribas and SC Lowy Financial.

Only $200,000 was drawn down on the original facility.

“The proceeds of the placement, in conjunction with Ausdrill’s cash reserves of $166.7 million, undrawn debt facilities and strong forecast FY18 cash flow generation, will provide significant balance sheet strength and flexibility to capitalise on potential growth opportunities available to the company,” Ausdrill said.

“In particular, strong growth is expected from Ausdrill’s African businesses on the back of an exceptionally robust and active pipeline of project opportunities which could necessitate an expansion of its existing mining fleet and an increase in its working capital needs as additional contracts are secured.”

Ausdrill shares have been placed in a trading halt, and were last worth $2.35 each.

Hartleys and Argonaut are acting as joint lead managers to the raising.

It follows news last week that Ausdrill had made a $31.4 million net profit for FY17, up 53.3 per cent on the back of strong performance in its gold operations in Africa.