Ausdrill will use the proceeds of the sale of its drilling business to pay down debt
Ausdrill has signed a sale and purchase agreement to sell its drilling tools business (DTA) for $66m to Finnish drilling manufacturer Robit plc. A link to the announcement is available here
. Ausdrill retains a 2.5 year supply agreement with DTA for the supply of drill bits going forward. The transaction includes DTA’s drill bit manufacturing and distribution business, which generates annual revenues of $35m.
The company plans to use the proceeds of the sale to pay down debt. Ausdrill reported net debt of $319.1m as at 31 December 2015 and total debt repayments over the 18 months to 31 December 2015 have totalled $141.9m.
Trading in Ausdrill is relatively illiquid, with the best estimate of a current indicative offer to be around USD90 (~10.5% - 11% yield to maturity).
With its relatively large exposure to the well performing gold sector, Ausdrill is a potential option for investors seeking a higher yielding, higher risk exposure to gold. The company’s market capitalisation has more than doubled since the beginning of the year to be currently at $164m.
Note: Pricing is highly indicative and the bond is thinly traded.
Please contact your FIIG representative for further details on the Ausdrill US dollar bond. Available to wholesale investors only with a minimum face value of USD200,000.