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27th
January 2010
ORBITAL RESTRUCTURES $19 MILLION
LOAN
PERTH, AUSTRALIA:
Orbital Corporation Limited announced today that it has reached
agreement with the Government of Western Australia, through the
Department of Commerce, to restructure the terms and conditions
of the long standing loan arrangement between Orbital and the WA
Government.
The parties entered into a Development Incentives
Agreement in 1989 under which Orbital was advanced $19 million,
interest free, to be repaid in one lump sum in 2014. Under the agreed
restructure the original loan has been terminated and replaced by
a new loan of $14.35 million (being the net present value of the
old loan at 30 June 2009) with the following terms and conditions.
- Term - 2010 to 2025.
- Repayments - Commencing May 2010 at $0.2
million per annum
- Repayments - Increasing annually to a maximum
of $2.1 million per annum in 2023.
- Interest free
Keith Halliwell, Orbital's Chief Financial
Officer, commented "We are pleased that the loan has been restructured
with a revised repayment plan".
"We appreciate the support the Western
Australian Government has given Orbital for many years and look
forward to the benefits that this new financing arrangement will
provide for Orbital stakeholders and for Western Australia."
added Mr Halliwell.
International Financial Reporting Standards
("IFRS") require the restructured loan to be initially
carried at a discounted net present value of approximately $7.6
million, which compares to the carrying value of the loan at 31
December 2009 of $15.3 million, and for that difference of approximately
$7.7 million (which is a non-cash item) to be accounted for as a
profit. The initially reported profit will be reversed as an expense
over the term of the loan as Orbital will incur non-cash interest
amortisation expenses of $0.5 million to $0.1 million per annum,
and totalling $6.8 million over the term of the loan. The present
non-cash interest amortisation expense of approximately $0.8 million
per annum expensed under the original loan facility will no longer
be incurred.
Forward Looking Statements
This release includes forward-looking statements that involve risks
and uncertainties. These forward-looking statements are based upon
management's expectations and beliefs concerning future events.
Forward-looking statements are necessarily subject to risks, uncertainties
and other factors, many of which are outside the control of the
Company, that could cause actual results to differ materially from
such statements. Actual results and events may differ significantly
from those projected in the forward-looking statements as a result
of a number of factors including, but not limited to, those detailed
from time to time in the Company's Form 20-F filings with the US
Securities and Exchange Commission. Orbital makes no undertaking
to subsequently update or revise the forward-looking statements
made in this release to reflect events or circumstances after the
date of this release.
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