Westralia Airports Corporation’s board and shareholders have approved a capital restructure that will enable WAC to fund investment over the next five years and position itself for expansion.
Westralia Airports Corporation’s board and shareholders have approved a capital restructure that will enable WAC to fund investment over the next five years and position itself for expansion.
WAC CFO Wayne Ticehurst said increased capital works would be funded through the issuing of additional convertible notes and increased borrowings from the Commonwealth Bank.
“The restructure is subject to final approval by lenders and note-holders, but we are anticipating to spend $100 million in the next five years to accommodate a growth in our four main business areas,” Mr Ticehurst said.
“About $60 million will be spent on the airport business, which involves $25 million on expanding the international terminal, which will hopefully be completed by the end of this financial year.
“We will also be expanding the old Ansett terminal, which we have acquired, and are undertaking preliminary runway works in anticipation of the new generation of A380 aircraft, but we won’t see that plane before 2008.
“Another $30 million will be spent on developing and expanding our 2,100 hectares of property, approximately 700ha of which is available for development.
“The money will be used to fund the provision of infrastructure and buildings.”
Woolworths’ $90 million regional distribution centre represents an anchor tenancy in a development that Mr Ticehurst said was going “extremely well”.
“Woolworths developed and built on their land themselves, but there are other ways to do it,” he said. “We are also building on some sites with the aim of leasing out the land and building.”
WAC has designed a number of sector specific areas to meet the growing demands of the transport and logistics industry.
Mr Ticehurst said a further $10 million would be divided between the other two business areas – ground transport (carparks) and retailing facilities.
“Particularly with the increased use of the domestic car park, we need to expand it and come up with a long term parking strategy,” he said.
WAC had a similar restructure of its balance sheet 12 months ago, which involved a convertible note issue of $45 million by WAC’s parent, Airstralia Development Group, to shareholders.
WAC is finalising preparations for a separate off-balance sheet property trust in which WAC shareholders will be given first interest.
“This will be the first of its kind in terms of national airports, and we hope to initially raise $12 million, and ultimately $40 million and then spin it off to a retail or wholesale investor,” Mr Ticehurst said.
Initially assets that the WAC has built will be transferred to the trust and then used as collateral for borrowings.
