ASX Raising A$553 Million to Fund Clearing, Growth ProjectsAdam Haigh
ASX Ltd., the operator of Australia’s main stock exchange, is raising A$553 million ($522 million) in a share sale to expand its clearing business and fund future projects.
ASX plans to sell the shares at A$30 each, a 16 percent discount to their last closing price, according to a statement. It will pay down A$250 million of unsecured debt and use A$200 million to expand ASX Clear (Futures), the exchange’s clearing facility and central counterparty for securities.
ASX Chief Executive Officer Elmer Funke Kupper won a battle this year to keep the exchange’s monopoly in the clearing and settlement of equity trades. The company is expanding its over-the-counter clearing service for interest-rate swaps and has cut fees to fend off competition in stock trading from Chi-X Australia Pty and dark-pool operators.
“I didn’t expect it to necessitate a capital raising,” said Anthony Hoo, a Sydney-based analyst at Nomura Holdings Inc. “The debt only matures in 2015 so it’s not clear why they’re doing it now.”
The shares will be halted until June 14, according to the statement. The stock closed at A$35.84 on June 7, valuing the firm at A$6.3 billion. The shares climbed 15 percent this year, compared with a 2.3 percent advance for the benchmark S&P/ASX 200 Index. The measure rose 0.4 percent to close at 4,757.10 today.
“ASX is one of the leading exchanges in the world and is making significant investments in Australia’s financial market infrastructure,” said Funke Kupper in the statement. “These investments support our ambition to be globally competitive.”
ASX sees underlying profit for 2013 of about A$346 million, according to the statement. That compares with the A$351 million mean estimate of 15 analysts surveyed by Bloomberg.
The exchange operator said it expects to pay 81 Australian cents as a final dividend and sees no change to its existing payout policy. The company reported 11-month unaudited statutory profit of A$318.7 million.
“By increasing the level of equity capital in our futures clearing house, we expect to meet emerging international capital standards for central clearing counterparties which are anticipated to be higher than previous standards,” said ASX Chairman Rick Holliday-Smith in the statement. “We are strengthening ASX’s position in the evolving clearing and exchange landscape.”