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Quickstep Holdings, the manufacturer of high-grade carbon-fibre components for the aerospace and automotive industries, is pleased to announce that Newmarket Financing Management Pty Limited and associates (Newmarket), which has a track record of investing in carbon-fibre companies, has agreed to provide a $3 million debt facility to Quickstep.
The new facility provides short-term working capital support for Quickstep as it continues to ramp up production at its Bankstown Airport facility for aerospace manufacturing contracts.Key aspects of the facility are:
The facility will support Quickstep’s strong growth as its deliveries for the F-35 Lightning II Joint Strike Fighter (JSF) and Lockheed Martin C-130J Super Hercules programs accelerate. Quickstep completed 188 JSF components in FY2014, increasing production to 200 parts delivered in the first half of FY2015. JSF production continues to ramp up. Production of C-130J ship-sets has expanded from seven ship-sets in FY2014 to 14 ship-sets in the first half of FY2015; and is expected to continue at an approximate rate of three ship-sets per month. Quickstep’s anticipated significant growth in manufacturing activity is on track and manufacturing sales are expected to grow from $12 million in FY2014 to more than $30 million in FY2015. As the programs build they will generate strong cash flow for Quickstep in subsequent years.As partial consideration for providing the loan, Quickstep will issue 25 million options to Newmarket to acquire ordinary shares in Quickstep on the following basis:
The Option Deed governing the options to be issued by Quickstep to Newmarket also gives Newmarket the right, but not an obligation, to participate in any equity fundraising conducted by Quickstep within 18 months of the Completion Date of the Option Deed. Such participation would be at the same price as other participants in the raising.Quickstep’s Executive Chairman, Tony Quick said, "We are pleased to secure this debt facility which will allow Quickstep to manage more effectively our increasing production capabilities. In the past six months, Quickstep has doubled sales compared to the previous full financial year; and the company has a firm order book valued at $56 million, with the majority of work to be completed in FY2015 and FY2016. In agreeing to the combined debt and option arrangement Newmarket has demonstrated confidence in Quickstep’s ability to deliver significant growth which will add to the market value of the company, noting that the pricing on the options is at a premium to Quickstep’s current share price and the 1 month, 6 month and 12 month volume weighted average prices (VWAPs). We welcome Newmarket as a business partner and look forward to strengthening our relationship with them.”More information:www.quickstep.com.au