Foster's taps into loans for liquidity
BEVERAGE major Foster's has taken out a three-year $US500million ($487m) debt facility to replace $467m in short-term notes due to mature over the next 12 months.
The company yesterday said the syndicated debt facility was initially planned as a $US300m borrowing but was increased to $US500m after being more than two times oversubscribed by Asian lenders.
The debt funding, made up of both Australian and US dollar facilities, is to be used for general corporate purposes and to maintain liquidity.
It will provide a replacement source of funding following the maturity of a $300m medium-term note facility in March next year, while a further $167m multi-currency facility is due to expire in June next year.
Chief financial officer Angus McKay said he was pleased with the response from lenders.
"With strong cashflow characteristics and an outstanding brand portfolio, Foster's received excellent support from Asian banks," he said.
ANZ, the Commonwealth Bank and the Bank of Tokyo-Mitsubishi UFJ were the lead arrangers for the debt raising, which followed a roadshow through Asian markets.
"While Foster's retains substantial existing undrawn facilities, this raising ensures we maintain a strong and diversified medium-term committed liquidity position for the group," Mr McKay said.
The debt refinancing comes as the company sorts through expressions of interest lodged from potential buyers of 33 vineyard and winery properties it flagged for sale in February.
The assets for sale include the 500ha Lindemans vineyard in Padthaway, South Australia, as well as the Baileys winery in Victoria's Glenrowan, which is to be sold with 140ha of vines.
The Kaiser Stuhl, Black Opal table wine and Boronia Marsala fortified wine brands are also up for sale.
Macquarie Bank analyst Greg Dring has estimated the sale proceeds at $197m, a discount of almost 20 per cent to book value of $240m.
Shares in Foster's, which is set to report its annual profit result on August 25, closed 1c lower at $5.48 yesterday.