Ausdrill secures funds for African expansion

Ausdrill rigs at night

Ausdrill has raised $100 million through a share placement to help fund its growth plans in Africa.

The mining services company announced yesterday it had completed the equity raising through a placement to institutional and sophisticated investors.

Ausdrill’s African business has a pipeline of project opportunities that could require funding for an expansion of its existing mining fleet, as well as an increase in working capital to accommodate new contracts, the company reported.

The Perth-based contractor, which issued around 46.8 million shares at $2.14 each, will also use the funds to strengthen its balance sheet.

“This $100 million equity raising reinforces Ausdrill’s financial strength and will further enhance Ausdrill’s ability to take advantage of the strong growth opportunities we are seeing before us, especially in Africa,” Ausdrill managing director Ron Sayers said.

Ausdrill, earlier this week, also announced it had refinanced and upsized its revolving debt facility from $125 million to $200 million to support its growth plans.

Sayers commented: “We executed exactly what we planned, which was to take advantage of the strength of our significantly improved credit metrics and to ensure adequate levels of liquidity for the group, which is currently experiencing strong growth.”

Ausdrill last week reported a 53.3 per cent increase in net profit during the 2017 financial year, with contracts in the gold sector guiding the result.

Growth in Ausrill’s African operations, as well as cost reductions and restructuring across the company, were also a significant part of the performance.