Prospectus estimates that the float would generate $2.5 billion in new capital have been exceeded, with approximately $2.9 billion in funds raised. The additional $400 million was raised through the recent subscription for additional shares by Cable & Wireless plc, convertible note holders and through the exercise of the Over-Allotment Option.
"This better than expected result has allowed Cable & Wireless Optus to reduce our proforma debt to equity ratio from 188 per cent to 11 per cent," said Mr Gillespie. "This results in lower borrowings and leverage than described in the Prospectus."
Consistent with Prospectus forecasts and the company's strong balance sheet, the new capital has been used to achieve a substantial reduction in borrowings by reducing proforma (30 June, 1998) debt from $3,406 million to $504 million.
As part of the repayment of borrowings, the company has paid out interest rate hedge contracts in excess of requirements and has incurred a termination cost of approximately $45 million which is around 2 per cent per annum of the principal amount of the excess hedge contracts.
"We have been able to make substantial repayments of bank and shareholder loans. The final amounts will be disclosed with the December 98 results. These will also show a one-off $45 million charge related to the costs of eliminating interest rate cover (associated with those repaid loans) which we no longer need. This will form part of the $210 million Prospectus forecast of interest charges for the year," added Mr Gillespie.
This cost was expected as a result of a successful share offer and its impact was incorporated into Prospectus forecasts for the financial year ending 30 June 1999. The cost will form part of the company's interest charge for the 6 months ending 31 December 1998 rather than being amortised across the full year.
For more information:
Cable & Wireless Optus
Phone: 02 9342 6064
Mobile: 0411 254 380