Refinancing Agreement

RNS Number : 5840E

Smiths News PLC

09 November 2020

 

   This announcement contains inside information

9 November 2020

Smiths News plc

("the Company" or "the Group")

 Refinancing Agreement

New term loan and revolving credit facilities

The Company is pleased to announce it has signed a new facility agreement to refinance its existing senior finance agreement, which was due to mature on 31 January 2021.

The new three-year £120 million facility, comprises a £45 million amortising term loan (Facility A), a £35 million bullet repayment term loan (Facility B) and a £40 million multicurrency revolving credit facility (RCF). The agreement is with a syndicate of banks comprising existing lenders HSBC, Barclays, Santander, AIB and Clydesdale and one new lender, Shawbrook Bank. The final maturity date of the new facility is 6 November 2023.

The facility is available at an initial margin of 5.5% per annum over LIBOR (in respect of both Facility A and the RCF) and 6% per annum over LIBOR (in respect of Facility B). This pricing is higher than current levels, but remains competitive, and is reflective of the tightened credit markets at this time.  The margin reduces as the Company reduces its net leverage.  

Consistent with the Company's stated strategic priority to reduce net debt, the new facility agreement includes an amortisation schedule of £15m per annum for the repayment of Facility A and certain restrictions on payments of dividends and other distributions, which in the short term will preclude a dividend in respect of FY2020.  In addition, the Company and its principal trading subsidiaries will provide security over their assets to the lenders.

Further details of the refinancing will be provided in the Company's preliminary results announcement for the 52 week period ended 29 August 2020, which is scheduled for release on Thursday 12 November 2020. 

Commenting on today's announcement, Jonathan Bunting, Chief Executive Officer, said:

"We are pleased to have reached this agreement after a thorough and robust process. The support of our banks positively reflects the strength of our business and the vital role we play in serving thousands of communities throughout England and Wales. This agreement, together with the recent completion of all our major contract renewals, completes a year of considerable strategic progress which further enhances the resilience of our trading and business model."

The Company was advised on the refinancing by EY Capital & Debt Advisory and Herbert Smith Freehills. 

Enquiries:

Smiths News plc

Jonathan Bunting, Chief Executive Officer

Tony Grace, Chief Financial Officer

[e-mail]  

www.corporate.smithsnews.co.uk  

Buchanan (Financial PR)

Richard Oldworth / Jamie Hooper

[e-mail]  

www.buchanan.uk.com

Person responsible for arranging release of this announcement:

Stuart Marriner, General Counsel & Company Secretary

Smiths News plc

Rowan House

Cherry Orchard North

Kembrey Park

Swindon

SN2 8UH

email: [e-mail]

LEI: 2138004O33ONVOOQXB02

About the Company

Smiths News is the UK's largest newspaper and magazine wholesaling business with an approximate 55 per cent. market share. It distributes newspapers and magazines on behalf of the major national and regional publishers, delivering to approximately 25,000 customers across England and Wales on a daily basis. The speed of turnaround in the UK and density of Smiths News' coverage is critical to one of the world's fastest physical supply chains.  In addition to the core Smiths News wholesaling business, Dawson Media Direct (DMD) supplies newspapers, magazines and inflight entertainment technology, to airlines and travel points in the UK and worldwide. Delivering to strict time windows with security accreditation, DMD serves circa 115 airports in 47 countries.

 

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