Keybridge Capital Limited

Media Releases

Quarterly Update
11 July 2012

  • Company continues to successfully realise investments and repay debt
  • Discussions underway to deliver long term financing to Keybridge to take out residual corporate debt
  • Audited Financial Statements for year ending 30 June 2012 to be released on 14 August 2012

Investment Portfolio Update

Keybridge continues to actively manage its existing investment and loan portfolio with the purpose of accelerating returns where practical and thereby accelerate the repayment of its residual corporate debt facility. No new investments are being made.

There have been no material asset realisations during the quarter. The Company, however, received a further amount of approximately $1.0 million, in addition to its contracted cash revenues, which was applied to the repayment of its corporate loan. Note in this report we have assumed FX rates at 30 June 2012 for USD/AUD of 1.00/1.018 and EUR/AUD of 1.00/0.808.

Details of the Company's individual loans and assets which make up its asset base were provided in the Company's Half Year results and presentations. Nothing has changed materially in that asset make up and, since 31 March 2012; Keybridge has received returns as expected from its Aviation, Infrastructure and Lending transactions.

The Company is presently undertaking its regular detailed valuation analysis of its investment portfolio for carrying value purposes for 30 June 2012. While it is apparent from preliminary analysis that certain asset classes continue to be under valuation pressure (e.g. Shipping and, to a lesser extent, Aviation), this is somewhat offset by stronger performance of the Company's other assets. We expect, on current analysis, to record a minor adjustment to the carrying value of our aggregate assets from that shown at 31 December 2011.

Net of the Company's corporate debt, other unsecured liabilities and before inclusion of year end operating results, the net assets of the Company are approximately $45.4 million. This equates to an NTA per share of approximately $0.26.

Debt Facility

The outstanding principal amount under Keybridge's corporate debt facility is now USD39.1 million. It was approximately USD107 million at 30 June 2011 and USD43.9 million at 31 December 2011. Our debt facility has a maturity date of 3 June 2013 and key terms for the extension have been outlined in previous announcements to the market.

One of the key terms is that minimum principal repayments are required to be made so as to reduce the principal outstanding to USD25 million by 31 December 2012. This means Keybridge must further realise no less than USD14.1 million in asset realisations and/or asset finance restructures over the next six months so as to achieve that milestone. If we do not achieve this milestone, the Company's lenders have a right to review the terms of the facility. Keybridge is focused on achieving this repayment requirement through a combination of selective asset realisations and/or debt restructures on specific underlying assets.

The Company has also commenced preliminary discussions with investors and financiers with regard to a total refinancing of both the Company's own debt requirements together with the restructure of the financing behind one of our key long term Aviation investments.


Keybridge currently has approximately $2.5 million of cash-on-hand. The Company expects to achieve a marginally positive operating cash flow position going forward. That is, the Company's fixed commitments of interest and operating costs are expected to be adequately met from operating income received.

This improved cash flow position has been achieved through the material reductions in our underlying debt, principally achieved from realisations of non-cash producing assets and the maturity of expensive interest rate swaps, leading to significant reductions in the Company's interest costs, as well as substantial reductions in our operating costs. Borrowing costs (i.e. interest and fees) for the year to 30 June 2012 were approximately $2.8 million as against $11.1 million for the year to 30 June 2011 and we expect borrowing costs for the current year to be further reduced from the 2011/12 financial year. Operating costs for the year to 30 June 2012 totalled approximately $3.2 million compared with $4.5 million in the 2010/2011 financial year, and are budgeted to be even lower going forward.

Currency Exposure

The approximate currency breakdown of the Company's assets and liabilities is as follows:

US Dollars
Australian Dollars

This net foreign currency asset position means that the Company continues to incur translation losses when the Australian Dollar appreciates in value against the US Dollar and Euro. Since 1 July 2011, the Australian Dollar has decreased in value against the US Dollar and gained against the Euro, resulting in an overall net unrealised foreign currency gain for the Company.

Board Directors

On 4 April 2012, Irene Lee retired from the Board as Non-executive Chairman and Peter Wood, Non- executive Director, was appointed to the position of Chairman. The Board now comprises Peter Wood as Non-executive Chairman, Mark Worrall as Managing Director and Nicholas Bolton as Non- executive Director. Since mid April 2012, Nicholas has taken on a part-time executive role assisting the Managing Director with matters associated with several investments, as well as refinancing strategies for the Company.

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, finance receivables and infrastructure.


For further information, please contact:

Mark Worrall
Managing Director
Tel: +61 2 9321 9000