WA GIANT Wesfarmers has reassured shareholders its Coles supermarket arm is improving and the group's debt refinancing is under control.
Chief executive Richard Goyder told the annual general meeting of the retail and resources conglomerate in Perth yesterday that debt refinancing and the Coles turnaround were within its control despite the turmoil on world financial markets, PerthNow reports.
``We have a balance sheet with a net debt to equity ratio of around 50 per cent, which is around where we would normally like it, and strong interest cover,'' Mr Goyder said.
``We feel that the concerns that some have expressed around this issue are unfounded.
``Like many companies, Wesfarmers has a certain amount of its debt rolling every year and much of the worry seems to be because we have debt to be refinanced in 2009 and 2010.''
Since April, Wesfarmers had refinanced more than $6 billion of debt including $800 million in the past two weeks, Mr Goyder said.
``This leaves less than $150 million that needs to be refinanced by 30 June 2009.''
He said Wesfarmers had $2.2 billion of debt due by December 2009, a standard revolving capital facility, and $5 billion due in October 2010, PerthNow reports.
Mr Goyder said discussions were well advanced to refinance remaining debt.
Chairman Trevor Eastwood, who retired today after more than 45 years with the company, said debt refinancing concerns were a key factor behind Wesfarmers' recent share price slump.
Mr Eastwood said the share price was ``doing reasonably well until last month''.
Wesfarmers shares were trading around $30 in mid September but have since plunged to levels not seen since 2001. Yesterdayday, they were down $1.19 to $18.06.
On Coles, Mr Goyder said the company was 12 months into a five-year turnaround and ``on track and feeling good about the business''.
``The board and I remain convinced that the turnaround of Coles will deliver value to our shareholders over the long term," he said.
``We are already starting to see some green shoots of improvement.
``The foundations needed for a sustained turnaround are being put into place, and driven at pace.
``And this work is starting to reflect in our trading results.''
Mr Goyder said trading had been strong in the four months to October.