Aquirian unlocks $25 million fleet funding as Wubin debt falls

NAB facility expands to $25 million

Aquirian Limited (ASX:AQN) has secured a sharp increase in equipment funding capacity from National Australia Bank, lifting the ceiling from $7.75 million to $25 million. The expanded arrangement is intended to fund fleet and equipment needed to service growth contracts, although the announcement does not say how much of the facility has been drawn or when individual purchases will be made.

The funding increase arrives as Aquirian prepares to scale its drilling services operation around the Brightstar Lord Byron contract. That three-year deal was valued at approximately $48 million, and the company has since begun mobilisation activity. The expanded banking capacity therefore gives Aquirian more flexibility to acquire equipment without relying solely on upfront cash, but it is funding capacity rather than committed revenue or earnings.

Wubin loan set for $3.1 million reduction

Aquirian will apply $3.1 million to reduce the NAB commercial loan associated with its Wubin emulsion facility, taking that balance from $9.1 million to $6 million. The company said the repayment is consistent with the use of funds outlined in its $8 million May placement, which was raised to support the Lord Byron expansion, inventory and debt restructuring.

The debt reduction is occurring alongside the commissioning of a larger operating platform at Wubin. Aquirian recently reported that the facility upgrade had been completed within budget, while its Drillforce business was preparing for the Lord Byron mobilisation. The combination of new asset capacity and lower commercial debt is favourable on its face, though the announcement provides no detail on interest rates, fees, covenants or maturities under the revised banking arrangements.

Cash falls as Lord Byron mobilisation begins

Unaudited cash at bank was $9.5 million at 30 September, down from $11.3 million at 30 June. Aquirian attributed the movement primarily to mobilisation costs and the working capital build associated with commencing the Brightstar Lord Byron contract. The figures offer a useful reminder that contract growth can require cash well before the related operations generate receipts.

Aquirian said asset finance will be only one part of its fleet strategy. Operating leases and mine-owner free-issue rigs provide other ways to add equipment while keeping the business capital light, and Managing Director Greg Patching said the group would choose the funding structure best suited to each contract. The next practical test will be whether fleet additions, mobilisation spending and debt reduction translate into stronger cash conversion without putting pressure on the balance sheet.