WES/TEN/TRU.

Money is vital at all times, not just now when its cost and availability are both a bit difficult to work out, and at a premium when you can find some.

But three companies of differing sizes yesterday reported success in raising cash, one way or another.

Trading in Wesfarmers shares resumed yesterday after the company finished an important part of its huge fund raising to refinance part of the Coles purchase from last year.

The shares rose after the group raised $940 million from the sale of shares to institutional investors as part of the $2.5 billion equity raising to eliminate the $4 billion in short term funding for the Coles deal.

Wesfarmers shares jumped to a high of $38.36, before the afternoon slide took them lower. They closed at $36.75, down 22c on the close before the funding raising started 12 days ago.

Late last week the company said an institutional entitlement offer and associated bookbuild would raise about $940 million at an offer price of $29 per new Wesfarmers share.

The bookbuild clearing price for the shares was $37.25 per share, $1.17 above the theoretical ex-entitlement price of $36.08 and $8.25 above the $29.00 offer price.

The new shares will begin trading on May 6.

The remaining proceeds from the entitlement offer of about $1.6 billion will be raised through the retail component of the offer, which opens on Monday and retail shareholders can subscribe for one new Wesfarmers share for every eight held.

And the Ten Network has completed a refinancing of its loan package it hinted at when revealing interim earnings last month.

The company said yesterday that it had secured a $630 million three year syndicated bank facility, despite the tough conditions in credit markets.

“Our ability to swiftly conclude refinancing arrangements amid the current challenging market conditions indicates great confidence in Ten,” group chief financial officer John Kelly said in a statement to the ASX.

The multi-currency revolving cash advance facility replaces an existing facility that was due to expire this December.

The new facility was arranged by Westpac and was supported by six banks. The participating banks are Westpac, ANZ, National Australia Bank, Toronto-Dominion, Citigroup and JP Morgan.

The Commonwealth bank failed to renew its part of the loan and there’s suggestions Ten finished $70 million short of its initial target of $700 million.

The company said at the time of the earnings release that the added cost of the new facility would be around $2 million a year; which isn’t a bad outcome given all the uncertainty about lending and finance companies from the credit crunch.

Ten shares ended up 3c to $2.28, after being 6c higher during the day.

They were probably also higher after the Network had one of its biggest ratings wins for a couple of years on Sunday night. The finale of So You think You can Dance Australia was the star and more than 1.8 million people watched it. The second last episode of The Biggest Loser (the final weigh-in) was also popular on Sunday night with more than 1.5 million viewers.

That gave Ten a big win over Nine and Seven and with the final of The Biggest Loser to be shown on Thursday and Big Brother starting last night, the network could go close to winning the overall ratings this week. Ten’s TV audience is the most improved this year among the networks and Pay TV.

And small financial services firm Trust Company Ltd yesterday reported a 24% rise in profit after tax but before extraordinary items, to $16.1 million for the year to February 9.

But it is expecting a much tougher year in 2008

After other income and significant items, it booked a 20% fall in its full year statutory profit to $20.3 million, compared to $25.4 million in 2006-07.

Trust Co’s result on an earnings before interest, tax, depreciation and amortisation (EBITDA) basis beat its previous guidance, rising 18% rise to $23.1 million. Guidance was for a rise in operating profit of “not less than 15%”.

Now, the company says it’s expecting flat growth in operating EBITDA for 2009.

“Current uncertainty in investment markets presents an ongoing challenge for all financial services and trustee companies in the short term.

“Offsetting this is the fact that over half of Trust’s operating revenue comprises annuity style income streams that are less affected by movements in asset values.”

Trust Co is expecting an operating EBITDA for 2009 “similar to the $20.3 million”, excluding the contribution from a joint venture, that it achieved in fiscal 2008.

It says it is well positioned with strong market shares, a large, loyal and diverse client base and critical mass in funds under advice, and has developed “an attractive annuity base”.

“Trust’s long-term underlying business drivers remain strong: an ageing population, increased regulatory scrutiny and need for independent fiduciary oversight,” the company said.

“In view of the volatility in financial and equity markets in the second half, this was an extremely pleasing result which has enabled the board to once again increase dividends to shareholders,” the company said in a statement.

Trust has declared a final fully franked dividend of 30c per share, bringing the total full franked ordinary dividends for the year to 54c per share, up 23% on the previous corresponding period.

Despite the forecast of a flat result, the company will again have a profit report distorted by significant items: this time they will be a profitable distortion.

It announced the sale of its 50% interest in its BNYTA joint venture with The Bank of New York Mellon (BNY Mellon) for $39.2 million cash.

That will produce an accounting after tax profit in the 2009 results this time next year of around $14 million.

In March, Trust Co revealed that it had started merger talks with Equity Trustees but it said yesterday those discussions were still at a “very preliminary stage” and due diligence had yet to start.

The company will distribute the equivalent net cash proceeds from the sale - approximately $32 million - which represents $1.00 per share.

So it was no wonder the company’s shares rose strongly yesterday, jumping $1.48 to close on the day’s high of $11.38. That was on a day when the overall market started out strongly but faded in the afternoon.

This Information is provided to you by the Australasian Investment Review (AIR).
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AIR reports about financial markets and investment products in the widest sense possible. The AIR website and all its contents is prepared for general information only, and as such, the specific needs, investment objectives or financial situation of any particular user have not been taken into consideration. Individuals should therefore talk with their financial planner or advisor before making any investment decisions.




	
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