UK transmission giant Arqiva has received a £867 million cash injection ($1.4 billion) from its existing shareholders. This new equity funding will now release a further £3.7 billion of refinanced loans and bonds to slot into place.
The new equity will be used to pay down debt, and thereby help Arqiva achieve a BBB investment grade credit rating, essential for the larger loan restructuring. Arqiva’s current loans, taken out in 2007, were due to mature in 2014.
However, the end result means that Arqiva is still saddled with big debts and obligations.
It is borrowing (senior loans) from a consortium of 20 banks, each typically putting £140 million into the pot. Additionally, Arqiva is raising another £500 million via an investment grade bond, and another £600 million via a high-yield bond. There’s also a £400 million loan to cover capital expenditure over a 5 year period, a £100 million working capital facility plus £200 million of shorter-period (364 day) financing.
Arqiva’s annual revenues top £800 million.