- Write by:
-
Friday, May 17, 2019 - 3:39:16 PM
-
880 Visit
-
Print
Mining News Pro - Mining services company Ausdrill is dropping a previously announced refinancing plan due to ongoing heated trade debates between the United States and China.
According to Mining News Pro - The company had intended to refinance its existing debt facilities — including debts related to its $271.5 million acquisition of Barminco last year — by taking advantage of the competitive pricing offered by US notes.
However, the company today explained this would no longer be feasible on account of a US equities slump caused by China’s imposition of $US60 billion ($87.1 billion) in import tariffs in retaliation of earlier tariffs sanctioned by US President Donald Trump.
The Chinese Government’s announcement of a 25 per cent import duty on numerous US products caused a dive in stocks on Wall Street earlier this week, with the Dow down 473 points (it’s second-biggest dive in 2019), Nasdaq down two per cent and S&P 500 down 1.7 per cent by the end of trading on Tuesday.
Ausdrill chief financial officer Peter Bryant said the economic conditions had previously provided an “opportune time” for the refinancing, but this was no longer a feasible option.
“Unfortunately, the escalation in the US-China trade war and the sharp decline in the US equity markets earlier this week meant that the attractiveness of refinancing was no longer there,” he said.
“While we are disappointed that the market has turned, we have stated many times that we will be disciplined around capital management and will not undertake transactions, including refinances, unless the economics are beneficial to the company.”
The company is the latest in a line of miners to comment on the effects of the trade sanctions between the two countries.
BHP chief executive Andrew Mackenzie referenced the dispute in a speech to shareholders in London last November, saying, “I expect that the current assault on the global trading system will jolt countries outside of this dispute into action.”
This was not the first time the US President had raised the mining major’s ire; the company was hit earlier in that year with a record tax expense of $US1.8 billion in its 2018 half-year report, which was attributed to Trump’s decision to reduce US Federal corporate income tax rates from 35 per cent to 21 per cent.
A survey of 51 key decision makers in the mining and metals sector carried out by law firm White & Case in January also found that 31.4 per cent of respondents cited Chinese slowdown as the number one risk to the mining and metals sector in 2019, with the impact of the ‘Trump tariffs’ in second place.
Short Link:
https://www.miningnews.ir/En/News/376068
A Russian arbitration court ruled on Monday that four units of Swiss commodities trader Glencore will pay more than 11.4 ...
A Native American group has asked all members of a US appeals court on Monday to overturn an earlier ruling that granted ...
The London Metal Exchange (LME) on Saturday banned from its system Russian metal produced on or after April 13 to comply ...
China’s state planner on Friday finalized a rule to set up a domestic coal production reserve system by 2027, aimed at ...
Chile’s SQM called another investors meeting at the request of its second-largest shareholder, Tianqi Lithium Corp., ...
The world’s coal-fired power capacity grew 2% last year, its highest annual increase since 2016, driven by new builds in ...
Peabody Energy Corp. shares sunk to the lowest in seven months after the biggest US coal miner warned that first-quarter ...
Rio Tinto said on Wednesday it is teaming up with a global venture studio and start-up investor to back the development ...
BMO Bank quietly dropped its policy restricting lending to the coal industry in late 2023, helping it avoid being ...
No comments have been posted yet ...