New Banking Facility

RNS Number : 5542J

Speedy Hire PLC

01 July 2011

 



1 July 2011

Speedy Hire PLC announces new banking facility

Speedy Hire Plc ("Speedy") announces the signing of a new £220m asset based revolving credit agreement with a syndicate of six banks to replace its existing £210m cash flow based loan facility, which was due to mature in June 2012. The facility will be used for general corporate purposes.

The facility, which matures in January 2015 with no prior scheduled repayment requirements, carries pricing of LIBOR plus 225bp to 400bp depending on leverage and on the components of the borrowing base. Initial drawings under the new facility will be at a blended rate of LIBOR plus c.325bp. This is c.25bp lower than the blended margin currently paid in respect of the previous facility.

In addition to four existing lending banks continuing to provide support to the Group, the bank syndicate has been strengthened by the addition of two new banks, Bank of America and GE Capital, who both have extensive experience of the US asset based lending market (where this type of facility is extensively used by the major rental companies). Lead arrangers are The Royal Bank of Scotland ("RBS"), Barclays Corporate, Bank of America and GE Capital and the other two lenders are Lloyds TSB and Burdale Financial (the asset based lending subsidiary of Bank of Ireland). RBS is the facility agent.

As a consequence of adopting an asset based financing solution, the Group's previous financial covenants have been reduced and simplified and headroom within the new facility has been increased.

The Group expects to record an exceptional financing cost of approximately £2.2m in the first half of the year for the non-cash write-off of the remaining unamortised balance of costs associated with the previous facility. Fees and expenses to establish the new facility will be amortised over the period to January 2015. For the remainder of the current financial year, this will involve a non-exceptional financing cost of approximately £1.0m.

Commenting on the refinancing, Steve Corcoran, Chief Executive, said: "We are delighted that our leading relationship banks have participated in the new revolving credit facility and that two new lenders have also joined the syndicate. The support of our banks in providing a facility which gives additional headroom and is more flexible is a great vote of confidence and illustrates both the strength of our balance sheet and the quality of our asset base. We now have certainty with regard to our medium term funding; this is another key step in our recovery and will underpin our strategy to grow the business in the years ahead."

For further information please contact:

Speedy Hire Plc	Tel: [phone]
Steven Corcoran, Chief Executive
Justin Read, Group Finance Director
Hudson Sandler	Tel: [phone]
Nick Lyon / Kate Hough / George Parker

Notes to Editors:

Founded in 1977, Speedy is the leading UK provider of equipment rental and support services to a wide range of clients across the construction, infrastructure, industrial, manufacturing and facilities management sectors - as well as to local trades and industry.

Operating from over 300 fixed sites - together with a number of on-site facilities at client locations throughout the UK, Ireland and the Middle East - the Group supplies a range of services, including the provision for hire of:

·       small tools and equipment

·       surveying and measurement instrumentation

·       lifting and materials handling equipment

·       powered and non-powered low-level access equipment

·       compressed air

·       temporary power generation

·       mechanical pumps

·       temporary site communications

The Group also provides associated services through the provision of training, asset management and testing, repair, inspection and maintenance (TRIM), as well as offering advisory services in areas such as health and safety, environmental and regulatory compliance.

Website:  www.speedyhire.plc.uk

 

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