G8 tops up piggy bank with $550m
GOLD Coast childcare giant G8 Education has refinanced its debt – executing two agreements worth a combined $550 million.
The existing facilities will be repaid and cancelled with the new loans comprising a senior facility of $450 million underwritten by a syndicate including Commonwealth Bank, Royal Bank of Canada and Westpac and a junior facility of $100 million from Commonwealth Bank.
The money will be used to repay Singapore notes worth $SGD270 million ($275 million) and due to mature in May.
G8 CEO Gary Carroll said the new facilities provided sufficient liquidity to meet the company’s medium-term strategy growth and capital management plans.
“In addition, the refinancing delivers improved covenants, which provide significant headroom, an extended lending maturity profile (weighted average maturity profile of circa 4.5 years) and improved comparable pricing,” he said.
The announcement, filed with the ASX yesterday failed to provide a boost to the company’s struggling share price.
At the close of trade it was down 2¢, or less than 1 per cent, at $2.15.
G8 posted a half-year profit of $23.7 million – down 22.1 per cent on the previous period.
The Gold Coast’s largest listed company, which has a number of brands including Headstart Early Learning Centres and Pelican Childcare, said its underlying net profit – which strips out one-off items – fell 23.9 per cent to $25.6 million, while its underlying pretax earnings dropped 21.2 per cent to $48.1 million.
However, G8 said there were positive signs in the marketplace. It said occupancies increased by 2.2 per cent to 74.5 per cent in June.
The company is forecasting a 50 per cent drop in development applications filed for new centres and new centre openings in the second half of 2018.