- Minor amended terms for debt repayment milestone terms agreed with banks
- Corporate debt continues to be reduced with USD9.5 million paid during the quarter
- Corporate debt now reduced to USD29.3 million
- Company on target to meet all required debt facility milestones
Investment Portfolio Update
Keybridge continues to actively manage the wind down of its existing investment and loan portfolio
with the purpose of accelerating realisations where practical and thereby repayment of its residual
corporate debt facility. No new investments are being made. Once debt is repaid in full (through
realisations and/or refinancing), the Company will be able to consider its options for the future – i.e.
continued wind down and return of capital to shareholders, or a possible re-commencement of
investment activity.
Since 30 June 2012, approximately USD8.7 million of investment repayments have been received.
This includes receipt of an after tax distribution of USD6.0 million from Keybridge's interest in a US
private equity fund previously announced on 3 August 2012, which was completed on 10 August
2012.
Details of the Company's individual loans and assets which comprise its asset base were provided in
the Company's 30 June 2012 Full Year results and presentations. Nothing has changed materially in
that asset make up and Keybridge continues to receive cash flows and returns as expected from its
Aviation, Infrastructure and Lending transactions.
One of Keybridge's significant assets (approximately $11 million) is a loan to a Queensland-based
motor vehicle leasing company. The owners of that company have signed a non-binding Heads of
Agreement to sell its vehicle leasing business to a major international corporation. To facilitate
completion of confirmatory due diligence and purchase documentation by the parties, Keybridge
agreed loan extension terms on its mezzanine loan facility to this company which was otherwise due
at 30 September 2012. This loan has now been extended to 31 December 2012, and subject to
certain conditions being met by the purchaser, will be automatically extended to 28 February 2013
pending expected completion of the sale by that date. If this sale is completed, it will result in
Keybridge's loan to our customer being repaid in full.
Net of the Keybridge's corporate debt and other unsecured liabilities, and net operating income for the
quarter, the net assets of the Company as at 30 September 2012 are approximately $45.1 million.
This equates to a NTA per share of approximately $0.26.
Debt Facility
The outstanding principal amount under Keybridge's corporate debt facility is now USD29.3 million
having been further reduced by USD9.5 million during the quarter. The 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 of our facility was that minimum principal repayments are required to be made
so as to reduce the principal outstanding to USD25 million by 31 December 2012. If we do not
achieve this milestone, the Company's lenders have a right to review the terms of the facility.
In order to facilitate the loan extension to the motor vehicle leasing company, as detailed above,
Keybridge sought and promptly received certain minor amendments to these milestone terms. These
amendments now require Keybridge to achieve USD27 million by 31 December 2012 and USD25
million by 28 February 2013. All other terms remain materially unchanged, save for minor
amendments in line with the amended two staged milestone process. We greatly appreciate the
continuing support provided by our banking syndicate in these matters.
As our debt now stands at USD29.3 million, Keybridge needs only to make further repayments of
USD2.3 million between now and 31 December 2012, plus a further USD2 million by the end of
February 2013. Cash on hand, contracted cash income and further expected asset realisations will
allow us to achieve those milestones by their required dates. Assuming the sale of the motor vehicle
leasing business is completed on or before 28 February 2013, the Company's debt will then be
reduced to approximately USD16 million.
The Company continues to discuss options with several parties on 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 to deliver material improvements in cash flow from this
investment.
Cashflow
Keybridge currently has approximately $2.1 million of cash-on-hand. The Company expects to
continue to be able to adequately meet its fixed commitments of interest and operating costs from
operating income received.
Currency Exposure
The approximate currency breakdown of the Company's assets and liabilities is as follows:
| |
Assets |
Liabilities |
Net |
| US Dollars |
42.3m |
30.0m |
12.3m |
| Australian Dollars |
26.0m |
0.7m |
25.4m |
| Euros |
5.6m |
- |
5.6m |
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 2012,
the Australian Dollar has increased in value against the US Dollar and the Euro, resulting in an overall
net unrealised foreign currency loss for the Company.
Board Directors
The Company's AGM is to be held on Tuesday, 9 October 2012 at 10.00am at the Essex Room,
Quay West Suites, 98 Gloucester Street, The Rocks, Sydney, NSW. Shareholders are encouraged to
attend to ask any questions of 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.
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