Qube weighs increasing borrowing

Import and export logistics company QUBE HOLDINGS is pursuing initiatives to enhance its liquidity, including increasing its bank facilities and monetising its property assets, according to its filing to the Australian Securities Exchange last Monday. 

The company will have cash and available undrawn debt facilities of over A$450m after the payment of the interim dividend on April 7.Qube has no debt maturing in the short term and has material headroom to its covenants.It is in the process of determining if it can realise some of the substantial value at Moorebank Logistics Park and to reduce its future funding requirements given the sizable capital expenditure it would likely need. 

A group of prospective parties has expressed interest to participate in the next stage of monetisation or partnering process for Moorebank Logistics Park and certain other property assets, but this is likely to take longer than previously anticipated in light of the current environment, according to the filing.In 2017, Clean Energy Finance Corp provided a A$150m seven-year bilateral term loan to Qube to back the construction of the Moorebank Logistics Park. 

The development was to switch 1.55m freight containers at Port Botany from road to rail, slashing more than 110,000 tonnes of carbon dioxide equivalent a year of transport-related emissions.The park includes up to 850,000 square metres of warehousing, an import-export rail terminal connected to the container terminals at Port Botany and an interstate terminal.In 2016, a consortium including Qube Logistics Holdings raised A$1.05bn loan to back its acquisition of Asciano Ltd’s ports business. ANZ, Citigroup, Commonwealth Bank of Australia, National Australia Bank and Sumitomo Mitsui Banking Corp were the mandated lead arrangers and bookrunners. 

The loan is split into a A$500m three-year term loan tranche A, a A$500m five-year term loan tranche B and a A$50m three-year revolving credit facility tranche C. The margin on tranches A and C is 160bp over BBSY, while tranche B pays 180bp over BBSY based on the credit profile of the underlying assets. The borrowing entity is Patrick P&L Bidco. Qube’s business comprises three divisions – ports, bulk and logistics, infrastructure and property, and strategic assets. It also holds a 50% interest in Patrick Terminals, Australia’s leading container terminal operator.