asciano urged to dump asset sales, raise capit

Asciano urged to dump asset sales, raise capital

http://www.businessspectator.com.au/bs.nsf/Article/Asciano-urged-to-dump-asset-sales-raise-capital-pd20090605-SPQD6?OpenDocument


By a staff reporter, with Reuters

Debt-addled ports and rail operator Asciano Group Ltd has been urged to consider a capital raising instead of its planned asset sales, as the company's deadline for expressions of interest in its monetisation process looms.

Final bids for all or parts of Asciano are due later on Friday, with the company aiming to announce a deal by the end of June.

Pension funds and private equity players such as TPG Capital, The Carlyle Group and Global Infrastructure Partners, owned by Credit Suisse and General Electric, have all looked at the company.

But JPMorgan analyst Matt Crowe told Fairfax Media the preferred option for Asciano should be a capital raising, warning it should avoid selling assets at the bottom of the market.

"If they raised $1.5 billion in equity that would be a much more manageable equity-to-debt profile. The problem with selling an asset is you lose the earnings that asset produces, whereas you don't get that if you sell equity," Mr Crowe said.

Asciano, which remains bogged in $4.6 billion of debt, last week extended facilities worth $258 million, maturing in May 2009, by six months to the end of November 2009.