Santos debt deal funds gas projects , Santos
Release Date: 2010-07-20
SANTOS has added $1.3 billion in funding for the major liquefied natural gas projects it plans for Papua New Guinea and Queensland.It is achieving this by executing a loan facility that brings its available funding to $6bn.
While analysts said the chance of an equity raising had not been substantially reduced, the increased liquidity the loan would provide during a period of heavy capital spending buoyed the Adelaide oil and gas company's shares on a bleak day for the rest of the sharemarket.
Santos yesterday revealed it had executed a $2 billion bilateral bank loan facility with nine local and international banks. The loan would be used to refinance $700 million of undrawn bilateral bank facilities maturing between 2011 and 2013.
Santos chief financial officer Peter Wasow said the facilities provided flexibility to fund Santos's growth, including Gladstone LNG.
"This facility provides Santos with additional liquidity during the scheduled construction period of GLNG and PNG LNG and delivers average maturities beyond first LNG production from the two projects," Mr Wasow said.
Santos's 13.5 per cent stake in the $US15bn PNG LNG project and its plans to build a $10bn-plus LNG plant at Gladstone have led to speculation the company will need to do an equity raising.
Analysts said that while the extra facility did not significantly lessen the chance Santos would need to raise equity, it would put the company in a much better position when it came to financing GLNG.
It is not clear how much capital Santos will ultimately need for GLNG.
It will be dependent on the eventual cost of the project, which Deutsche Bank estimates at $16bn; whether it sells up to 19.9 per cent equity in the project to potential gas customers Korea Gas and Sinopec; and the success of talks with Shell and PetroChina to jointly develop the project.
"The increased facility gives Santos an enhanced ability to do the Gladstone project, but they still need to bring in buyers and hopefully someone like Shell to combine with," UBS analyst Gordon Ramsay said.
Santos shares rose 6c to $13.71 yesterday as the rest of the stockmarket tumbled 1.5 per cent and other energy stocks fell.
Santos chief executive David Knox has not ruled out some equity raising to finance the projects in order to keep the company's credit rating where it is.
The bank facility was self-arranged and attracted offers of $2.9bn from 13 banks, Santos said.
It accepted offers from nine banks in arriving at $2bn, with tenors ranging from four to seven years and a weighted average term of five years.
The company would not reveal which banks were involved.
| Type: | NORMAL |
| Company: | Santos |
| Country: | 澳大利亚 |
| Url: | http://www.theaustralian.com.au/business/santos-debt-deal-funds-gas-projects/story-e6frg8zx-1225894298970 |