Strategic Banking Partnership

RNS Number : 1075N

Renold PLC

14 May 2015

 

Renold plc

("Renold" or "the Company" or "the Group")

Strategic Banking Partnership

Renold, a leading international supplier of industrial chains and related power transmission products, announces a new five year strategic partnership with its current banks.

To support the Group's three phase Strategic Plan, Renold has completed the re-financing of its core group banking facility that was due to mature in October 2016. The revised facilities take advantage of favourable market conditions for financing costs and have been extended to mature in April 2020. The facility now also includes a £20m accordion feature which allows the company to access additional funding should the need arise.

The underlying £41m Multi-Currency Revolving Credit Facility (MRCF) and £8m of ancillary facilities have been modified to enhance debt management flexibility for the Group. The facilities continue to be provided by a banking group comprised of Lloyds Bank Commercial Banking and Handelsbanken.  The MRCF is fully committed until maturity.

The principal covenant is the Net Debt / EBITDA ratio, which remains at a maximum of 2.50 times until maturity. Renold's recent trading update, issued on 9 April 2015, indicated a Net Debt / EBITDA ratio of approximately 1.0 times following a year of good operating cash generation.

The new facilities will bring an immediate reduction in borrowing costs with scope for further savings as leverage reduces. This reduction in the margin on the new facility, combined with lower leverage, is expected to give rise to annual savings in external financing costs of approximately £0.3m.

Robert Purcell, Chief Executive of Renold, commented:

"The new financing agreement provides ongoing support for our progressive capital investment plans and working capital needs as we transition into the 'Growth' phase of our Strategic Plan.  Looking further ahead to Phase Three, the accordion feature also means that the Group will be well placed to take advantage of bolt-on acquisition opportunities that align to our Strategic Plan."

14 May 2015

ENQUIRIES:

Renold plc	0161 498 4500
Robert Purcell, Chief Executive
Brian Tenner, Finance Director
Instinctif	020 7457 2020
Mark Garraway
Helen Tarbet
James Gray

NOTES FOR EDITORS

Renold is a global leader in the manufacture of industrial chains and also manufactures a range of torque transmission products which are sold throughout the world to a broad range of original equipment manufacturers and distributors. The Company has a well deserved reputation for quality that is recognised worldwide. Its products are used in a wide variety of industries including manufacturing, transportation, energy, steel and mining.

Further information about Renold can be found on the website at: www.renold.com

 

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