AMA Cuts Funding Costs by 350bps with New $110M Debt Deal
AMA Group has locked in a $110 million debt facility from two major Australian banks, improving funding costs and enabling strategic expansion in the collision repair sector.
- New $110 million debt facility with a 3-year term
- $80 million revolving working capital and $30 million bank guarantees
- Funding cost reduced by 300-350 basis points
- No disposal of ACM Parts required
- Facility supports growth, capital expenditure, and acquisitions
Strategic Recapitalisation Completed
AMA Group Limited (ASX: AMA) has announced a significant financial milestone with the securing of a new $110 million debt facility from two major Australian banks. This facility, structured over a three-year term, replaces the existing $97.5 million debt due to expire at the end of 2025, marking the completion of AMA's recapitalisation efforts.
The new facility comprises $80 million in revolving working capital and $30 million in bank guarantee lines, offering the company both liquidity and flexibility. Notably, the cost of funds has been reduced by 300 to 350 basis points compared to previous arrangements, reflecting improved credit terms and lender confidence.
Supporting Growth and Strategic Initiatives
Group CEO Mathew Cooper highlighted that this facility positions AMA to pursue significant growth opportunities within the collision repair market. The improved covenant structure and flexible terms are designed to accommodate capital expenditure and strategic acquisitions, which are central to AMA’s expansion plans.
Importantly, the new debt agreement does not require the disposal of ACM Parts, a subsidiary or asset that might have been considered for sale under previous financial constraints. This signals a more stable financial footing and a focus on organic and acquisitive growth rather than asset divestment.
Banking Syndicate Confidence and Market Implications
The facility is provided by two banks already part of AMA’s existing banking syndicate, underscoring their ongoing confidence in the company’s management and strategic direction. CFO Domenic Romanelli expressed gratitude for the support that has helped AMA navigate a challenging period, suggesting that the company is emerging stronger and better positioned for future success.
For investors and market watchers, the new debt facility reduces refinancing risk and lowers funding costs, which could translate into improved financial performance and enhanced shareholder value over the medium term.
Next Steps and Outlook
The transaction remains subject to final documentation and settlement, but the binding commitments indicate a high probability of completion. The market will be watching closely how AMA deploys this capital to accelerate growth, invest in people and facilities, and potentially pursue strategic acquisitions that could reshape its competitive positioning.
Bottom Line?
AMA’s new debt facility clears the path for growth—now the market awaits execution.
Questions in the middle?
- How will AMA prioritise capital allocation between organic growth and acquisitions?
- What impact will the reduced cost of funds have on AMA’s profitability and cash flow?
- Could the improved covenant flexibility enable more aggressive expansion strategies?
