Tranz Rail Expects To Successfully Conclude Refinancing Negotiations
Tranz Rail Holdings Limited announced this evening that it expects to conclude its refinancing negotiations tomorrow and
obtain all necessary approvals to proceed with its rights issue. The Aratere Group has given its consent and the banking
syndicate, including Citibank, has approved the Company’s new banking facility.
As part of this agreement, Tranz Rail will break substantially all its foreign exchange hedge contracts in respect of
its Aratere lease obligations. Based on current exchange rates this will not result in any impact on Tranz Rail’s income
statement and will provide cash proceeds in the order of $10 million. In addition, Tranz Rail’s lease payments through
to mid-2004 will be fully hedged.
Chairman Wayne Walden said, “While the company would have preferred to retain its passive foreign exchange position,
this outcome provides substantial funds to manage that exposure going forward in what is regarded as a favourable market
environment and outlook for the New Zealand dollar.”