Ann: Perenti to launch Note Issue in A$ MTN market, page-8

https://www.theaustralian.com.au/bu...m/news-story/5f6748b47a6a11cba91c6fecb19d03e2


Perenti to mine bond markets for $500m

Perenti generates about 68 per cent of its revenue from gold miners and 44 per cent from Australia.

• BRIDGET CARTER
  DATAROOM EDITOR
  
• 9:00PM SEPTEMBER 6, 2020

Mining services provider Perenti is the latest listed company heading to the bond market, with expectations it will secure more than $500m.

The $852m group is a product of a merger between Ausdrill and Barminco in 2018 and the understanding is that the business has plans to tap the Australian bond market and the US private placement market to refinance the Barminco bonds that were due in 2022.

Expectations are that Perenti will secure about $250m from the Australian bond market and about $US300m ($411m) from the US private placement market, with a coupon at between 5 and 5.5 per cent.

In June, Perenti Global underwent a debt refinancing, raising about $130m through a new syndicated facility of Australian bank debt.

Its net debt at June was $556m.

Perenti is a diversified global mining services group with businesses in surface mining, underground mining and mining support services.

It generates about 68 per cent of its revenue from gold miners and 44 per cent from Australia.
At the beginning of the year, Perenti was shaping up as the frontrunner to buy Downer Mining, which was up for sale through Macquarie Capital, but a deal never eventuated.

Sources say Perenti and Downer were understood to be about $100m apart on price for the $500m-odd business.
But another factor was that Perenti was planning to carry out an equity raising through investment bank UBS to pay for the business, which was taken off the table amid the onset of the COVID-19 pandemic when its share price fell sharply.

Now it is understood that Perenti has walked away from Downer Mining for good due to concerns about gaining too much exposure to the coalmining industry, with Downer having a far greater exposure.

Currently, Perenti only generates about 3 per cent of its revenue from coal, which is out of favour with investors because banks are refusing to fund companies with a major exposure to the commodity due to environmental concerns.
The coal price has also collapsed amid COVID-19 due to the global economic weakness and cheaper oil price.

Now Downer is planning to break up the Downer Mining operation and sell it off to smaller players.

Last month, mining services provider Emeco Holdings raised $149m of equity after earlier considering a move to tap the US bond market through JPMorgan.
A raise through Macquarie Capital and Goldman Sachs was considered to be the better outcome due to the bond market terms on offer.