Melrose Industries PLC Financing Update (0505V)
August 04 2020 - 2:00AM
UK Regulatory
TIDMMRO
RNS Number : 0505V
Melrose Industries PLC
04 August 2020
MELROSE INDUSTRIES PLC
4 August 2020
FINANCING UPDATE
Melrose Industries PLC ("Melrose" or the "Group") today issues
an update on financing.
Following the trading updates on 30 March 2020 and 22 July 2020,
Melrose has now agreed amended arrangements with its banking
syndicate including improved financial covenants to 31 December
2022. Beyond that date the Group reverts to the original covenants
for the balance of the facilities' term. These amendments cover all
the Group's primary borrowing arrangements that contain financial
covenants.
The Group's committed c.GBP3.2 billion revolving credit facility
is repayable in January 2023 and the Group's committed term loan of
c.GBP0.9 billion can be extended to April 2024 at Melrose's option.
In addition to these committed banking lines the Group has two
bonds: a GBP450 million bond maturing in September 2022 and a
GBP300 million bond maturing in May 2032, neither of which contain
financial covenants.
Melrose is grateful for the continued support of its lending
banks which means that it has the flexibility it needs to continue
to focus on cash generation and adapting the Group to current
market conditions. The new financial covenants have been designed
to give Melrose considerable headroom and flexibility.
There is a modest cash cost to secure this amendment but there
is no change to previously agreed interest rate calculations.
Melrose has passed its covenant tests for 30 June 2020 and would
not in fact have needed the net debt: EBITDA waiver granted
previously.
The improved financial covenants are shown in the table
below:
Financial 31 December 30 June 31 December 30 June 31 December
Covenant 2020 2021 2021 2022 2022
Net debt Waiver* Waiver 5.25x 4.75x 4.0x
:EBITDA ** ** **
------------ -------- ------------ -------- ------------
EBITDA
:Net finance
charges 2.5x 3.0x 3.0x 3.25x 4.0x
------------ -------- ------------ -------- ------------
*Announced on 30 March 2020
**Subject to downward adjustments upon certain material
disposals
Following 31 December 2022, the financial covenants revert to
3.5x (for net debt: EDITDA) and remain at 4x (for EBITDA: net
finance charges).
Simon Peckham, CEO of Melrose Industries PLC, said:
"We have now put in place new amended arrangements with our
banks that last until the end of 2022. We thank our banks again for
their continued support which gives us the headroom and flexibility
to continue to focus on cash generation and adapt the Group as
needed. Melrose also retains over GBP1 billion of cash liquidity.
We are confident that we can position the Group to produce good
returns for Shareholders."
- ends
Enquiries:
Montfort Communications: Nick Miles
+44 (0) 20 3514 0897
+44 (0) 7973 130
669
miles@montfort.london
Charlotte McMullen
+44 (0) 20 3514 0897
+44 (0) 7921 881
800
mcmullen@montfort.london
Melrose Investor Relations: +44 (0) 7974 974690
ir@melroseplc.net
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END
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