1987 - Year of the shrinking market?
After doubling borrowings in the 1985/86 financial year to pay for investments worth A$3.1 billion, the Broken Hill Proprietary Co, Australia's largest corporation, plans a quieter year in the capital markets in 1987.
"We don't necessarily need funds at the moment, but, as with most corporates, we will be looking to restructure our portfolio,' said BHP corporate treasurer Graeme McGregor.
BHP has felt inhibited in the Euromarkets by being subject to takeover bids and by what it sees as a generally jaundiced view of Australian issuers. In the last half of 1986 it has concentrated on converting short-term finance into long-term maturities. Most refinancing has been through private placement, particularly in Japan and Belgium. The process will be completed in early 1987, said McGregor, and the company would then switch attention to the US dollar swap markets. "We've got more floating-rate money than we would like,' he noted.
In marked contrast to the past year, BHP does not plan major acquisitions during 1987. "We are looking for a period of consolidation while we make sure we are managing our new businesses effectively,' said McGregor.