Dorchester debt position immediately after TUA acquisition
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Originally Posted by
Snoopy
On 9th September 2014, Dorchester announced they had secured a bank debt facility of up to $39.55m to fund the acquisition.
In the same press release the projected debt required to be taken on in repect of 100% acquisition of Turners (which is what happened) was declared as:
(iii) Acquisition of 100% Shareholding
(Purchase of 80% in addition to the current 20% shareholding)
Share issue at $0.25 $30.0m
Bonds $18.0m
Bank Debt $18.0m
$66.0m
So this means the bank debt facility projected to be available to the rest of DPC was:
$39.55m - $18m = $21.55m
Looks like Dorchester's actual three way funding mechanism for acquiring TUA was a little different to what management expected. From p4 of the interim HY2015 report.
Share issue at $0.25: 125.8m at 25c = $31.4m (4.8% higher than projected)
Bonds: $23.2m@ $1.00 =$23.2m (28.9% higher than projected)
New Bank Debt: $10.0m (45% lower than projected)
The closing comment in the interim report says:
"The final consideration mix and successful capital raise to fund the Turners acquisition has resulted in a balance sheet with headroom for further merger and acquisition activity." ($29.55m of borrowing headroom by my calculation)
The subsequent acquisition of "Greenwich Life" announced on 10-04-2015, and "Southern Finance" on 30-07-2015 certainly made sure the 'new' TNR made those acquisitive ambitions a reality!
I should note that although this information is in the HY2015 interim report with accounts dated 30th September 2014, the new shares, bonds and new debt were allotted after balance date. So the interim account figures do not represent the post Turners Auctions acquisition position.
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Unfortunately the detail in the HY2015 press release, outlining the match or mismatch of maturing customer loans to the underlying bank debt was non existent. So until more detail is published in the half yearly annual report, this is as far as my analysis can go.
TNR has transformed remarkably since HY2015 (30-10-2014) balance date. So the following figures from HY2015 are rather historical.
Finance Segment Assets: $94,909m
Finance Segment Liabilities: $72,763m
Nevertheless it is comforting to know that the finance sector assets were on the books at a 30% premium to the finance sector liabilities at the time.
SNOOPY