Specialist Australian drilling services company DDH1 Limited (ASX: DDH) today announced that it has finalised terms, consistent with terms detailed in its Initial Public Offering Prospectus, with Bankwest, a division of Commonwealth Bank of Australia, for debt facilities of up to $60 million.
The Bankwest debt facilities, which include a $50 million revolving credit line, will assist DDH1 with executing its disciplined growth strategy as detailed in its Initial Public Offering Prospectus. The Bankwest facilities are the sole significant credit lines arranged by and available to DDH1 and, importantly, allow the Company to secure additional third-party, asset-backed funding if required.
Bankwest facility provides for $50 million revolving credit and $10 million asset finance.
Bankwest facilities add to DDH1’s strong balance sheet, which had net cash of $3.3 million at the time of listing on the ASX.
DDH1 is continuing to execute its growth strategy to enhance further its market position as Australia’s premier mineral drilling contractor.
The Company will have 103 drill rigs across Australia by the first half of FY22 (see ASX announcement dated 31 March 2021), up from 97 at present, and continues to experience strong demand for its industry leading services.
The DDH1 growth strategy is focused on servicing increasing demand from its wide client base and of winning new work. DDH1 will continue to grow organically and actively seek opportunities to acquire complementary businesses that enhance the Company’s leading market position.
Commenting on the Bankwest facilities, DDH1’s Chief Financial Officer Ben MacKinnon said:
“We are delighted to have agreed on terms with Bankwest that provide DDH1 with funding to execute our strategic growth plan – at a time when there is increasing market demand in Australia for the high-quality services that we deliver.
“The support from Bankwest underscores DDH1’s standing as a financially responsible and disciplined mineral drilling sector operator and is built on our strong balance sheet, which had net cash of $3.3 million at 9 March 2021.
Since the company’s inception in 2006, DDH1 has established a track record of executing its long-term vision alongside balancing short-term profitability and investment in growth, enabling us to remain consistently profitable while growing market share.”
The Bankwest $50 million revolving credit facility has a five-year term and can be used by DDH1 for general corporate purposes, including acquisitions, capital expenditure and working capital. The $10 million asset finance master limit facility is uncommitted and can be used for equipment purchases. Both facilities are on normal customary terms and secured over DDH1 assets.