Keybridge Capital Limited

Media Releases

Market Update
18 May 2009
  • Keybridge Capital has crystallised $7 million of additional cash by closing-out foreign exchange contracts
  • Company’s net asset value now more dependent on value of Australian Dollar

Foreign Currency Position

The assets of Keybridge Capital are denominated in US Dollars (64% as at 31 March 2009), Australian Dollars (24%) and Euro (12%).
As a result of amendments to its corporate debt facility implemented in March 2009, just over a half of the Company’s foreign currency assets are matched by borrowings in the same currencies.  A further amount had been hedged through the use of forward foreign exchange contracts.

These forward contracts, at current exchange rates, were approximately $7 million in the money.  The Company determined that it was optimal to cancel the foreign exchange contracts and crystallise this in-the-money position to provide additional cashflow to the business.

Of the cashflow generated, some will be applied to debt reduction and some will be used, if required, to top-up existing Keybridge Capital investments where it is judged to be beneficial for the preservation of value.

The Company’s high level balance sheet is as follows:

Net Assets
US Dollar
Australian Dollars
Total AUD Equivalent*

* At exchange rates of AUD1.00 = USD0.75 and AUD1.00 = EUR0.55

As a result of closing-out the forward foreign exchange contracts, the value of the Company’s net assets is now more dependent on the value of the Australian Dollar against the US Dollar and the Euro.  A fall in the Australian Dollar will increase the Company’s net assets; whilst a rise in the currency will lead to the opposite outcome.


We continue to seek to accelerate the realisation of investments.  In the current environment, however, this is difficult to achieve.  Over the next six months, we anticipate receiving at least $10 million of repayments.  We are working on strategies to bring other realisations forward.

We expect conditions in the markets in which the Company operates to remain difficult for at least the remainder of this calendar year.  We are yet to complete the carrying value assessment of our portfolio.  However, we anticipate needing to recognise significant additional impairment provisions in our June 2009 accounts and declaring a loss for the financial year.

Depending on the size of the additional impairment provisions, there may be implications for the covenants under our banking facility.  If this were the case, we would advance discussions with our banks with the objective of ensuring that we remain able to realise investments in the ordinary course, to facilitate both repayment of our debt and, in due course, returns of capital to shareholders.

Keybridge Capital is a financial services company that has invested in, or lent to, transactions which predominantly are in the core asset classes of property, aviation, shipping and infrastructure.


For further information, please contact:

Mark Phillips
Managing Director
Tel: +61 2 9321 9000
Karen Penrose
Chief Financial Officer
Tel: +61 2 9321 9006