Update on Banking Facilities and Tower Project

RNS Number : 9830A

Hargreaves Services PLC

10 April 2012

 



For immediate release

10 April 2012

HARGREAVES SERVICES PLC 

(the "Group" or "Hargreaves")

Update on Banking Facilities and Tower Project

Hargreaves Services plc (AIM: HSP), the UK's leading supplier of solid fuels and bulk material logistics, today issues the following update.

UK Banking Facilities

The Group is pleased to announce the successful conclusion of the re-financing of its core UK banking facilities. The Group has taken the opportunity to increase its core UK facilities from £115m to £175m, comprising of a £125m revolving credit facility and a £50m invoice finance facility.

The arrangement has been concluded with a five bank group comprising RBS, HSBC, Lloyds, Santander and Barclays and is committed through to 30 October 2015.

The decision to secure new facilities early will result in an exceptional charge in the current financial year to write off unamortised arrangement fees totalling £0.4m but will provide certainty, lock in slightly improved pricing and provide the Group with increased debt capacity to support its growth aspirations. The pricing on the revolving credit facility in the core leverage ratchet is 235bp over three month LIBOR compared to 250bp on the expiring facility. The reference margin on the invoice finance facility has been maintained at a competitive 200bp over the banks' base rate.

Tower Banking Facilities

The Group is also pleased to announce that its joint venture, Tower Regeneration Limited ("TRL") has successfully agreed banking terms in line with its business plan.

TRL's facilities will comprise working capital facilities of £10.5m and asset financing credit lines of £32m. The working capital lines are to be committed for two years. The asset financing lines are to be committed for 5 years. These facilities are expected to be completed this week.

We are also pleased to announce that coal shipments from the Tower site to the Aberthaw Power station have commenced ahead of schedule even though the site is still is in its early development phase. All site development activities are expected to be complete around 31^st May 2012 and the site will be in full operation thereafter.

For further details:

Hargreaves Services Gordon Banham, CEO Iain Cockburn, Finance Director	0191 373 4485
Buchanan Tim Anderson	0207 466 5000
N+1 Brewin Nick Owen Sandy Fraser	0845 213 1000
Jefferies Hoare Govett Sara Hale Harry Nicholas	0207 029 8000

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