Transfield Services supports outcomes from Transfield Services Infrastructure Fund capital structure review

11 May 2010

Transfield Services Limited (ASX Code: TSE) confirmed today that it supported the outcomes of the Transfield Services Infrastructure Fund (ASX Code: TSI) capital structure review. TSE has a 47.5 per cent stake in TSI.

For TSI, the outcomes are expected to result in a renewed capital base and a solid financial platform to deliver attractive distributions to its security holders, while further developing its high quality asset portfolio.

Key outcomes from the review for TSI include:

• Corporate-level debt refinancing with maturity extending May 2015
• An equity raising of $110 million, fully underwritten by Macquarie Capital Advisers and RBS, and supported and partly sub-underwritten by Transfield Services
• The sale of Mt Millar Wind Farm for $191 million, representing a valuation of over 13x FY10F normalised EBITDA attributable to Mt Millar

As part of the TSI equity raising, TSE will be committing up to approximately $53 million through a $24 million partial take-up of its pro-rata institutional entitlement and a $29 million sub-underwriting of the retail offer.

TSE’s 47.5 per cent interest in TSI is expected to be diluted depending on the final take-up under the retail offer. For example, if 50 per cent of the retail offer is taken up, TSE’s interest in TSI is expected to reduce to 43 per cent.

The outcomes of the review will benefit TSE shareholders through:

• A forecast TSI FY11 distribution of 8.2 cents per security representing a yield of 11.7 per cent (based on an offer price of $0.70 per new security for the Placement and the Entitlement Offer)
• Ongoing access to a pipeline of opportunities from which TSE can benefit through a renewed TSI capital base
• Continuing success and development fees and the provision of ongoing operations and maintenance services provided to TSI assets

TSE confirms that it will incur a one-off after tax equity accounting cost of an estimated $22 million ($16 million non-cash) from TSE’s pro-rata share of TSI’s sale of the Mt Millar Wind Farm, interest rate swap break costs and other transaction costs. This assumes a 50% take-up of the Retail Offer.

Excluding the net impact of this one-off cost, the Company maintains its FY10 guidance. This one-off cost will also not impact TSE’s ability to pay dividends or materially impact full year gearing targets.

For more information please view ASX Release including slide pack attached or visit www.tsinfrastructurefund.com.

Transfield Services supports outcomes from Transfield Services Infrastructure Fund capital structure review (including slide pack)

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