6th April 2020 By Chris Hutching | chris@tourismticker.com | @tourismticker.com
Auckland International Airport says it will raise up to $1.2bn to ensure it remains well capitalised during the Covid-19 lockdown and prepared for recovery.
The operator announced the fundraising to the NZX this morning, which would comprise of a $1bn fully underwritten placement with institutional investors and a $200m share purchase plan.
Adrian Littlewood
“Impacts to Auckland Airport’s operating environment have been characterised by a substantial decline in international and domestic passenger numbers and a material decline in aeronautical and non-aeronautical revenue,” chief executive Adrian Littlewood said.
“The Covid-19 pandemic has had a significant impact on Auckland Airport’s operations and will continue to do so under the current border restrictions, and through the subsequent recovery period.”
The placement has been underwritten at a price of $4.50 a share, a discount of 10.7% to the last close price of $5.04 per share on April 3, 2020 and a discount of 12.6% to the 5-day prior period of $5.15.
This compares with the mid-January price of $9.19.
The $200m will be raised with an offer to eligible existing shareholders, enabling them to subscribe for up to $50,000 of new shares.
A trading halt was granted by NZX to facilitate the placement.
The $1.2bn is expected to be sufficient to meet all operating, investing and financing cash flow obligations under a range of recovery scenarios, said the company.
The airport had secured support from its lenders, including covenant waivers from its banking group and extensions to all bank facilities due to mature before December 31, 2021.
“Auckland Airport remains committed to completing a number of infrastructure projects focused on essential safety, asset replacement, maintenance and resiliency, including the planned runway pavement replacement,” the operator said.
Over the past 12 months we have made excellent progress, beginning construction on three key anchor infrastructure developments, while other projects such as the Domestic Jet Hub were just about to kick off, Littlewood said.
“While our long-term plans remain the same and we still are optimistic about the long term outlook for passenger growth, our near term projections no longer hold true. As incredibly difficult as it is for our team to see progress stall, we have had no choice but to move just as swiftly to suspend or cancel the majority of our infrastructure development programme.”
Capital expenditure projects with an estimated completed project value of more than $2bn had been suspended or cancelled to reduce Auckland Airport’s short term funding obligations, while allowing the flexibility to recommence key projects in line with changing operational priorities and improving operating conditions.
The airport expected to incur about $275m of capital expenditure between April 2020 and December 2021, with the program focusing on essential safety, asset replacement, maintenance and resiliency, including the planned runway pavement replacement.
Auckland Airport said the capital raise was being underwritten by Jarden Partners, Credit Suisse and Citigroup Global Markets.
