On the 25 April 2016, Adani Abbot Point Terminal (AAPT) disclosed details of a proposed capital management plan that is intended to de leverage and improve the cashflow position of the company
AAPT’s proposed plan includes:
- An equity contribution of $75m. According to AAPT, not less than $25m has already been provided, with the balance up to $75m expected to be received on or before 31 May2016
- A potential further $50m depending on certain conditions surrounding pricing and user agreements
- The reserving of up to $165m of free cash flow during the period up to 30 September 2018
It is AAPT’s intention that these above amounts will be applied towards voluntary prepayment or selective buybacks of senior debt as permitted under various documents. Alternatively these funds could be used towards the cost of re-setting hedges at more favourable terms.
It is important to note that AAPT stresses that this plan is only the company’s “present intention”. AAPT stated: “The terms of the proposed capital management plan may change from time to time and the Company may elect not to implement the plan, in each case at its discretion and without notice.”
The company’s announcement can be viewed here.
This article is written by Mark Bayley. The lead credit analyst, Alen Golubovic will add his comments when he returns from holiday.