- Significant aviation repayment completes
- Outstanding corporate debt reduced to less than USD60 million
- Material improvement in Company's future net operating cash flow
Keybridge is continuing to actively manage its remaining asset portfolio with the objective of bringing forward investment realisations wherever practicable. The Company is currently not undertaking new investment activity. Its goal is to reduce its level of corporate debt to the point where the Company is in a sustainable financial condition. The Company is also looking actively to reduce its operating costs in line with its reducing asset base.
Since 30 June 2011, approximately USD47 million of investment repayments have been received. This includes settlement of the aviation repayment previously announced on 1 August 2011, which completed on 14 October, delivering USD45.16 million of repayment proceeds to Keybridge. This amount was marginally higher than the Company's written down carrying value for this investment as
at 30 June 2011.
One other significant repayment is being progressed, relating to one of the Company's lending transactions. This repayment is currently expected to settle by December 2011 and should deliver net proceeds in excess of USD10 million to Keybridge.
The Company continues to consider all opportunities to further realise on its remaining investments portfolio at fair value.
Debt Facility
After applying the proceeds from the aviation repayment to debt reduction, the principal outstanding under Keybridge's US Dollar corporate debt facility is USD59.6 million, down from USD107 million as at 30 June 2011.
Under the terms of its debt facility, Keybridge was required to repay the equivalent of AUD12.5 million between 1 January 2011 and 2 December 2011. With the completion of the aviation repayment, the Company has now met all its interim debt principal milestones, including the milestone required to reduce its borrowing margin under its facility with effect from 18 May 2011.
Investments Portfolio
The composition by asset class of Keybridge's investments portfolio has changed materially following this aviation repayment and is now approximately as follows (at exchange rates of AUD1.00 equal to USD1.03 and EUR0.74).
| |
AUDm |
% of Total |
| Aviation |
44.4 |
43% |
| Lending |
33.0 |
32% |
| Shipping |
9.6 |
9% |
| Property |
9.6 |
9% |
| Infrastructure |
7.4 |
7% |
| Total |
104.0 |
100% |
The investment repayments achieved since 30 June 2011 have been from the Company's aviation and lending asset classes.
The value of Keybridge's assets continues to represent the orderly realisable value of these investments. These values are determined from time to time having regard to the present value of the cash flows to Keybridge associated with the assets based on reasonable assumptions made by the Company, which are adjusted as and when required according to market circumstances.
Cashflow
The Company continues to experience a shortfall between its cash investment income and its fixed commitments of bank interest and operating costs. As a consequence of the completion of the aviation repayment, this shortfall will reduce materially, as interest costs decrease due to the substantial reduction in the Company's outstanding debt.
The Company currently does not bring to account any accrued income on its investments, but only books cash income received. The aviation investment which has now been repaid has not produced any cash income to Keybridge for several years.
The Company currently has approximately $3.2 million of cash-on-hand.
Currency Exposure
The approximate currency breakdown of Keybridge's assets and liabilities is as follows:
| |
Assets |
Liabilities |
Net |
| US Dollars |
74m |
60m |
14m |
| Australian Dollars |
29m |
1m |
28m |
| Euros |
6m |
- |
6m |
This net foreign currency asset position means that the Company incurs translation gains (losses) when the Australian Dollar depreciates (appreciates) in value against the US Dollar and Euro. The Australian Dollar has declined in value since 30 June 2011, resulting in a net unrealised foreign currency gain for the Company.
Annual General Meeting
The Annual General Meeting of the Company will be held at 10:00am on Thursday, 20 October 2011 at the offices of Keybridge Capital at Level 26, 259 George Street, Sydney.
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.
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