Airline Virgin Blue Holdings Ltd
(ASX:VBA) has today launched a fully underwritten equity raising to raise around $231.4 million to improve liquidity and provide increased financial flexibility.
The raising will be conducted via an institutional placement and entitlement offer at 20 cents a share.The company says it expects to report a loss of $160 - $165 million for fiscal 2009.
Virgin says that the key drivers of the business - capacity, demand and fuel - remain volatile. However the company expects its result on fiscal 2010 to be breakeven with a positive group cash inflow.
CEO Brett Godfrey says the company has invested $850 million in the business this fiscal year with the launch of 22 new routes and achieved sustainable cost reductions throughout the business.
Mr Godfrey says these initiatives along with the proceeds of the capital raising and Virgin’s new code share agreement and planned joint venture with Delta Air Lines, will ensure the company is well placed to move quickly to participate in the upside as markets recover.
And in other news Mr Godfrey announced that he will retire from the role of CEO next year. Virgin Blue’s 2008 net profit more than halved from its high in 2007 of $215.8 million.
Mining and construction company Macmahon Holdings Ltd (ASX:MAH) has been awarded a two year contract extension at BHP’s Olympic Dam copper and uranium mine in South Australia.
The contract is worth $110 million and involves underground mine development works.
CEO Nick Bowen says the company’s contract at Olympic Dam has now been extended four times since Macmahon began operating at the site in 2004.
There are around 180 people employed on the site with the contract extension to be effective from August 2009. Macmahon Holdings 2008 net profit was $48.75 million.
Transfield Services Infrastructure Fund (ASX:TSI) says it expects to report a non cash impairment write-down of $80 million pre-tax when it announces its full year results on August 17.
The company says the write-down will reduce its reported net profit after tax for the year to June 30 by $60 million.
Following a comprehensive review of each of its assets, the board decided to write-down the carrying value of the Collinsville Power Station in Queensland.
Transfield says the revised value reflects a reassessment of the operating life beyond the existing power purchase agreement and the application of a higher discount rate.
The company says the impairment write-down will not affect its earnings before interest, tax, depreciation and amortisation or distribution guidance confirmed on June 18 2009 nor impact debt covenants. Transfield Services Infrastructure Fund posted a profit in 2008 after a loss the year before.
