Engineering firm RCR Tomlinson has entered into an agreement for a $280 million banking facility and secured a $100 million insurance bonding facility.
The facility agreement, with the Commonwealth Bank, and the bonding facility will be used to complete the acquisition of Norfolk Group and ongoing working capital.
According to the company its three year banking facility is comprised of a cash advance of $100 million, a multi-currency contingent instrument facility of $120 million, and a multi-option of $50 million for working capital.
Following the start of the Norfolk acquisition scheme later this month, RCRC will use its new facilities and existing cash to pay $78 million for Norfolk, and $62 million to repay Norfolk's existing secured debt.
RCR's managing director, Paul Dalgleish, stated that this "facility provides RCR with a competitive debt facility to complete the acquisition without the need to raise new capital".
"It also provides RCR with balance sheet capacity for our future growth aspirations".
Dalgleish added that the company has generated strong cash flows over the last year, and the use of a 100% debt funding for the acquisition positions RCR well.
The insurance bonding facility was entered into with the Swiss Reinsurance Company for $100 million, which aid RCR in refinancing Norfolk's
bank guarantees and securing new project works.