WestStar Industrial Limited (ASX: WSI) has secured ~$7.5 million bond facilities from Export Finance Australia.
Under the Facilities, Export Finance Australia will provide bonding to be used across a selection of WSI’s current projects which have a combined contract value of approximately $222 million. In addition, the securing of these facilities will also release approximately $5 million currently on account with clients back to the company.
Export Finance Australia is Australia’s export credit agency, wholly owned by the Australian Government and provides financial expertise and solutions to drive sustainable growth via these bonds to SME enterprises, larger corporations and government organisations.
Managing Director and CEO of Export Finance Australia Swati Dave said the approval of these facilities demonstrates Western Australia’s mining services sector is strong and powering the State’s economy.
Export Finance Australia’s support for SMEs and businesses in the critical minerals supply chain is helping them expand, pivot and grow,” Ms Dave said.
“Our strong relationship with WestStar Industrial and our support has helped them pursue new opportunities in the mining services market. This year we’ve issued more than $13 million in bonds to six customers in Western Australia.”
Export Finance Australia is rated AAA by Standard & Poor’s (S&P).
WestStar CEO and Managing Director, Robert Spadanuda, said to have received the backing of Export Finance Australia, who will provide bonding for a selection of WSI’s current works under contract of ~$222M, is a significant third-party endorsement of the WestStar Industrial business.
“The fact that these facilities undergo significant third-party audit and compliance suggests that WSI has been assessed on the strength of its balance sheet, contracts, net equity position, projected cashflows and current project status, by external parties who have satisfied themselves of WSI’s compliance with regulatory assessment,” he said.
“We look forward to a continued relationship with Export Finance Australia into the future to support this exciting growth phase that the business has entered.”
In addition to securing this bonding facility, the company continues to achieve significant milestones in demonstrating its ability to rapidly deliver its accelerating order book.
WestStar has now secured a record-breaking $222 million of contracted revenue with existing contracts. These contracts predominantly consist of:
- Iron Bridge Magnetite Project circa $145M
- Lynas Rotary Kiln circa $12M
- Acciona Waste to Energy circa $10M
- Ambania Compressor Station circa $25M
- Various Contracts $30M
Additionally, the future order book pipeline is strong, with tendering and negotiations expected to yield more contract awards in the near future.
A well-balanced portion of all submissions are from both repeat and new clients within the resources, petrochemical, mining, infrastructure and oil and gas sectors.
The $3.5 million raised from the recent Placement to institutional and sophisticated investors also provides WestStar with the ability to fund future activities and order book increase across its wholly owned subsidiaries SIMPEC and Alltype Engineering.
Mr Spadanuda said the company continues to demonstrate its ability to responsibly manage its working capital requirements and satisfactorily support current orderbook, whilst managing cash reserves to fund future growth and order book opportunities.
“The company is in a strong position heading toward the end of the calendar year evidencing record cash receipts and a record cash balance enabling the sustainable growth and profitability across the business,” he said.
“The repayment of $300,000 remaining on our debt facility, which was previously issued to support WestStar’s working capital management, is particularly satisfying and positions WestStar Industrial with no debt.
“The EFA facilities will imminently release a further $5M in cash, a direct increase to our already significant cash balance to progress our future activities across the SIMPEC and Alltype businesses.
“We look forward to updating the market this current quarter on additional project work, whilst continuing to deliver strong operational progress and outcomes for our clients. Our organisation is gathering momentum and is on track to deliver record receipts for the December quarter.”
