Take a look at how UDC was financed at balance date Macduffy.
FY2016 UDC Shareholder Capital $423.247m ANZ Committed Credit Facility $595.000m Debenture Investments From Public $1,591.711m
As a result of the purchase announced today, that UDC shareholder capital will pass to HNA.
From the Financial Report for FY2016 we learn that the amount of the ANZ committed facility was increased to $1,800m on 24th November 2016. (post balance date). That gives a headroom facility of:
$1,800m - $595m = $1,205m
I reckon that is more than enough to repay all maturing debentures until the deal goes through in the second half of FY2017. ANZ have agreed to fund UDC with a loan as low as 3% until the takeover date. Then the Chinese will be able to use their muscle to keep funding this finance company at unrealistically low interest rates until the competition cracks. The Chinese could continue a borrowing program in New Zealand. But with their own cheaper finance from offshore, why would they? I think it is all over for UDC debenture investors and potentially very stiff competition coming to other 'local' finance companies, including Heartland Bank!
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