Australia-Japan Cable completes refinancing

Stuart Corner
Monday, 05 October 2009 02:32

IT Industry - Strategy

Australia Japan Cable (AJC) - the 12,700km submarine link between Australia and Japan, says it has "successfully completed its refinancing, assuring its viability into the future."

The company gave no other details. However the announcement follows a report in The Australian newspaper in July claiming that AJC had been bailed out by its carrier shareholders purchasing additional capacity to the value of$A150m.

The Australian claimed to have "sighted a confidential letter from the company's majority lenders dated from April this year indicating that they had serious concerns about the company's ability to meet its debt obligations when they fell due at the end of this year."

The Australian went on to quote the letter as saying "We are disappointed that we have not seen to date any plan from management or the board of directors to address the pending [debt] maturity," It said the group behind the letter held about $99.5m or 64 percent of AJC's debt and had warned that they would be prepared to sell the company's assets if its debt obligations were not met.

AJC CEO, Robin Russell, declined to comment, telling The Australian "I don't see the need to share the details of our refinancing with anybody in particular. I don't think it's of public interest or a matter of concern to anyone but AJC and its financiers and shareholders,"

And, rather than reveal any details of the refinancing, the rest of AJC's press release was devoted to self-promotion. Commercial director Chris Kessikidis said the company had "adapted its operating model...Over the last year we have refreshed our brand and re-positioned the organisation. We are building on our strengths – the route, our outstanding availability and our low cost base."

Head of engineering, Phil Murphy, said that AJC was very pleased with the performance of its network equipment upgrade comprising new NEC and Alcatel-Lucent gear. "We have experienced 100 percent wavelength availability with the new 1:n wavelength protection equipment since it entered service in April 2008."

AJC is jointly owned by Telstra, BT, Verizon Business and Softbank.