DEBT REFINANCING

RNS Number : 2231F

Northgate PLC

20 April 2011

 



20 April 2011

NORTHGATE PLC

DEBT REFINANCING

Northgate plc ("Northgate", the "Company" or the "Group"), the UK and Spain's leading specialist in light commercial vehicle hire, today announces the successful signing of a comprehensive debt refinancing package for the Group.

The refinancing comprises three elements:

(1)   a new eight year £100 million term loan facility from the Prudential/M&G UK Companies Financing Fund ("M&G"), repayable in three equal instalments in October 2017, April 2018 and April 2019, which has enabled the Group to reduce its reliance on bank financing.  The pricing on this facility is LIBOR + 4.25%, reflecting its much longer maturity; and

(2)   a substantially changed committed bank facility with an extended maturity of September 2014, initially £470 million in size and reducing to £395 million in November 2012 to reflect the Group's expectations of its cash flow and resultant debt-reduction.  The interest costs under this facility are projected to save the Group £1.3 million in the year ending 30 April 2012 compared to the facility it replaces; and

(3)   the Group's existing loan notes (currently amounting to £173 million equivalent) will remain invested until their original maturity dates, which are between November 2012 and December 2016, and at their existing coupon rates

Taken together, these facilities provide the Group with £743 million of committed facilities up to the financial year-end in April 2012, and £620 million of committed facilities up to the financial year-end in April 2013.  These amounts provide the Group with substantial headroom above its forecast debt requirements.

The financial covenants on the new facilities and loan notes have been slightly modified, and the Group's forecasts indicate that it has sufficient headroom to comply with all covenants.

The Group has also made changes to its currency and interest rate hedging portfolio to reflect the new structure of the facilities.

Based on current debt levels, interest costs in the financial year ending 30 April 2012 will be approximately £1.0 million higher than if previous rates had prevailed.

The refinancing becomes effective upon the successful completion of all conditions precedent, the receipt of funds from M&G and the redistribution of those funds to existing lenders, which is anticipated to be within the next few weeks.

Our net debt continues to reduce with our focus on increasing the Group's Return on Capital Employed through hire rate improvement and internal efficiencies. The preliminary results for the year ending 30 April 2011 will be announced on 28 June 2011.

For further information, please contact:

Northgate plc                                      Bob Contreras, Chief Executive	01325 467558
MHP Communications	020 3128 8764
Andrew Jaques
Barnaby Fry
Anthony Arthur

Notes to Editors:

Northgate plc rents light commercial vehicles and sells a range of fleet products to businesses via a network of hire companies in the UK, Republic of Ireland and Spain.  Their NORFLEX product gives businesses access to a flexible method to obtain as many commercial vehicles as they require. 

Further information regarding Northgate plc can be found on the Company's website:

www.northgateplc.com

 

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