iSoft gets new financing arrangements

Health IT company restructures its debt facilities to get more flexibility across global operations

ASX-listed health IT company, iSoft (ASX:ISF) is restructuring its senior secured debt facility in an effort to garner more flexibility in managing its global footprint.

In a statement to the ASX, iSoft said it would undertake a new facility for three and a half years that consists of a £60 million loan and £60 million revolving credit.

The move to the new financing is expected to be completed by the end of the year and will replace the existing debt facility of £107.5 million.

The company said the new facility will reduce levels of debt servicing and provide greater working capital.

“The restructured facility provides iSoft with funding certainty through to June 2013,” iSoft CEO and executive chairman, Gary Cohen said in the statement. “It also moves our balance sheet away from its previous acquisition footing to one which gives us greater flexibility in managing our working capital as a large and growing global business. We’ve also extended the range of participating banks to reflect the international scope of our operations.”

The banks include: Barclays, Clydesdale/Yorkshire, Westpac, Bank of Ireland, KfW Group and Banco Santandar.

In early December iSoft down played the possibility of taking a hit from potential changes to its lucrative UK contract for the NHS National Program for IT.

Comments from chancellor Alistair Darling ahead of the UK government's pre-Budget report this week suggested the 12.7 billion pound program could be scrapped.

Speaking to Boardroom Radio Australia Cohen, said the government had since clarified the chancellor's statements and that there was little chance of the program being binned.

At the end of September iSoft posted a $20m growth in its net profit after tax (NPAT) to $34.7m, up from $14.7m for the last financial year.

The company, which operates in 39 countries and has about 7700 employees, also record total revenue growth of $540.1m up from $360.9m the previous financial year. EBITDA was $132.4m, up from $94.4m. The bulk of the company’s revenues (57 per cent) came from the UK and Ireland, largely driven by iSoft’s involvement in the NHS National Programme for IT. Continental Europe accounted for 26 per cent, A/NZ 12 per cent and the rest of the world 5 per cent.

Licences accounted for 35 per cent of revenues, maintenance & support 40 per cent, implementations 20 per cent and other services 5 per cent.

The company also announced in August it is halfway through a three-year IT transformation aimed at connecting its global offices, positioning the e-health company for further rapid growth and developing a proactive information infrastructure.

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