Transpacific Industries drags itself out of financial uncertainty with $800m equity deal with WP Holdings
Transpacific Industries has dragged itself out of financial uncertainty by securing $801 million through a deal with a private equity firm.
The Queensland-based waste management company has finalised its agreement with WP Holdings as part of a capital raising program to pump equity into Transpacific and pay down some $2 billion in debt.
The deal follows an announcement earlier this year from Transpacific that it suffered an 18 percent drop in profit.
WP agreed to commit more than $800 million in return for an 18 percent stake in Transpacific.
The publicly-listed Transpacific will issue 503 new shares, and began trading again today on the ASX.
Transpacific earlier this year voluntarily suspended itself from trading on the ASX while discussions with potential investors were happening.
The deal with WP is the final part of a capital raising program launched by Transpacific.
The company planed to reduce debt by at least $704 million and extend the term of the balance of its bank debt in new four and five year tranches to July 2013 and July 2014.
No refinancing of debt will be required until September 2012 under the recapitalisation plan.
When announcing the details of the capital raising venture earlier this year, Transpacific Executive Chairman Terry Peabody told the ASX the restructuring would make the company more resilient.
“We are pleased to have reached agreement with WP Holdings in terms of their proposed participation in the recapitalisation of the company and are looking forward to reaffirming our position as the leading waste management services company in Australasia,” Peabody said at the time.