Tranz Rail plans $60 million rights issue

Tranz Rail chairman Wayne Walden said in a statement today that on Friday the board expected to approve a pro-rata discounted rights issue to existing shareholders, to be completed before the end of March.

Following Tranz Rail's fall in credit rating to BB+ from BBB last month, the United States-based investors behind the sale and lease back agreement for the Aratere ferry were entitled to ask for a letter of credit for the ferry to cover its loss value of about $115 million.

Tranz Rail has since been in negotiation with Aratere Group, and had to resolve the issue before it could renegotiate its banking facilities.

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