Caltex to Raise Funds

Caltex Australia has announced that it is planning to raise as much as $300 million to help finance the changes it would implement for its operations. According to Caltex, the funds would be raised through capital markets.

The company intends to issue subordinated notes, which would be priced at $100 each. The notes target retail and institutional investors.

According to Caltex chief financial officer Simon Hepworth, this is the first time that Caltex Australia is holding its first retail-targeted capital markets transaction ever since the company was listed in the ASX. He added that investors would have a new opportunity to invest their money.

Hepworth explained that the funds would be used to pay down the company’s existing debts. Debt reduction would provide Caltex funding flexibility to coincide with the changes it would implement on its supply chain and marketing operations.

Last week, Caltex also announced that it is closing down the Kurnell refinery located in Sydney. More than 600 jobs would disappear in the middle of 2014.

Following the announcement of a mass layoff at Caltex, Prime Minister Julia Gillard said the federal government would work harder to ensure that at least 300 employees would be employed when the refinery finally closes.