Aurizon Shares Edge Higher On Refinancing Deal

By Glenn Dyer | More Articles by Glenn Dyer

Shares in Queensland-based rail freight company Aurizon edged up 1% on Wednesday after the company provided an encouraging update to investors on COVID-19 and its debt refinancing which will see more money borrowed, but a whack of short term debt repaid.

The company told the ASX that it had refinanced its debt with a group of banks and added an extra $420 million to its facility, taking total debt up to $1.3 billion.

Aurizon has also reconfirmed previous 2020 guidance, saying disruption from the pandemic has been minimal.

Some new money will be used to repay $525 million of term notes, leaving the company with available liquidity of $1.1 billion.

The new loan means Aurizon won’t have to repay any debt until 2023.

That saw the shares end at $4.90, up 1%.

CEO Andrew Harding said Aurizon’s operations continued throughout April and May with ‘minimal interruption’ in its bulk, coal, and network businesses.

“While the COVID-19 pandemic has had some impact to coal demand in Asia and on the Indian subcontinent, it has not been material to date to volumes and the company’s earnings,’’ he told shareholders through an ASX announcement.

“Accordingly, we reiterate our underlying earnings before interest and tax (EBIT) guidance of $880-$930 million for 2019-20.’’

Analysts reckon Aurizon twill earn an EBIT of $902.3 million, up from $829 million in 2018-19, when it releases results on August.

The shares touched $4.96, the highest they have been since late February when the COVID-19 loomed.

Glenn Dyer

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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