Loan Facility

RNS Number : 2298Q

Sports Direct International Plc

26 February 2016

 

26 February 2016

Sports Direct International plc
Mike Ashley/Mash Holdings Limited Loan facility

Since May 2014, Sports Direct International plc ("the Group") has financed its capital requirements through a revolving credit facility ("RCF") with a number of banks. The RCF recently has been increased to a capacity of £788 million. Under the terms of the RCF, the interest rate payable by the Group increases if it is more than one third drawn (i.e. more than £263 million). Previously, when the Group has required borrowing in excess of this amount, it has utilised its £250 million loan facility ("MALF") with Mike Ashley/Mash Holdings Limited. The rate of interest payable on this facility is c.50% lower than that payable on the RCF, and does not attract arrangement fees or commitment fees. Accordingly, although an unusual arrangement for a public company, using this facility in this way has been of significant benefit to the Group, over time giving rise to a saving of over £1 million.

In the coming months, the Group expects that its borrowing requirements will be consistently in excess of the £263 million level. The Group, however, has been subject to unjustified criticism over related party transactions, including incorrect press coverage of the benefits of the MALF. It has been decided that it is in the best interests of the Group and its shareholders to avoid further criticism at this time.  Accordingly, the Group will not draw down from the MALF in the foreseeable future, which will lead to an increase in the overall cost of borrowing.

Sports Direct International plc

Dave Forsey, Chief Executive 

Matt Pearson, Acting Chief Financial Officer

T: 0344 245 9200

KBA PR

Keith Bishop

T: 020 7734 9995

 

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