Young & Co.'s Brewery, P.L.C.
(“Young's” or the “Company”)
Financing and Liquidity Update
and
Update on Notice of Results
Notification pursuant to AIM Rule 11
Young's provides a further update in light of the ongoing Covid-19 situation.
Financing and Liquidity Update
Highlights
- Issued paper with a nominal value of £30 million and a maturity date of 13 May 2021 under the HM Treasury and the Bank of England's Covid Corporate Financing Facility
- In the process of finalising a new £50 million syndicated term loan facility and a new £20 million bilateral revolving credit facility
- Lending banks have agreed to waive any technical 'cessation of business' breach of the Company's banking facilities as a result of the Group's pubs being closed due to the coronavirus pandemic
- Lending banks have also agreed in principle to replace the Company's financial covenant tests at June, September and December this year and at March next year with a liquidity test
The Company has been confirmed as an eligible issuer for the HM Treasury and the Bank of England's Covid Corporate Financing Facility (the “CCFF”). Young's has therefore established a euro-commercial paper programme for the purpose of issuing paper through the CCFF. Pursuant to that programme, the Company has partially accessed the liquidity available to it under the CCFF by issuing paper with a nominal value of £30 million and a maturity date of 13 May 2021.
The Company has agreed with National Westminster Bank plc (“NatWest”) and HSBC UK Bank plc (“HSBC”) to a new £50 million syndicated term loan facility, to be split evenly between those two banks (the “New Syndicated Facility”). Each bank's credit committee has approved the terms of the facility, which will have an original maturity date falling on the fifth anniversary of the date the facility agreement is entered into. The Company will have the option next year to request an extension of the maturity date by a further year and will then be able to do the same the following year. Once the documentation has been completed, the Company intends to draw down on the facility immediately and repay in full the March 2021 £50 million syndicated facility with the Royal Bank of Scotland plc and Barclays Bank plc (the “Existing Syndicated Facility”).
The Company is also in the process of finalising a new £20 million bilateral revolving credit facility (the “New Bilateral Facility”) with NatWest. The bank's credit committee has approved the terms of the facility, which will have a maturity date falling on the first anniversary of the date the facility agreement is entered into. The Company will have the option later this year to request an extension of the maturity date by a further six months and will then be able to do the same again next year. Once the documentation has been completed, the facility will be available to be drawn down, as appropriate, to be used for general corporate purposes.
After the Company has refinanced the Existing Syndicated Facility via the New Syndicated Facility and has entered into the New Bilateral Facility, the Company will have in place £285 million of funds and committed facilities from its lending banks, private placement lenders and under the CCFF. In addition to this, the Company has a £10 million overdraft with HSBC.
All the Company's lending banks were supportive of Young's accessing additional liquidity. They were also agreeable to the Company refinancing the Existing Syndicated Facility via the New Syndicated Facility and to the Company strengthening its balance sheet further by entering into the New Bilateral Facility.
In addition, the Company's lending banks have agreed to waive any technical 'cessation of business' breach of the Company's banking facilities as a result of the Group's pubs being closed due to the coronavirus pandemic. They have also agreed in principle to replace the Company's financial covenant tests at June, September and December this year and at March next year with a liquidity test.
With the Group's strong balance sheet, supplemented by the actions announced today, the Company's board of directors is confident that Young's has sufficient liquidity to handle a prolonged period of closure of its pubs. The board expects the Company to be in a position to return to profitable growth when this unprecedented period is at an end and conditions allow.
Update on Notice of Results
The board now expects to issue the Company's preliminary results announcement for the year ended 30 March 2020 on 4 June 2020, instead of 21 May 2020. Whilst the Group's work on the year-end results, and Ernst & Young LLP's audit of them, is progressing well, a further two weeks will enable completion of the work required taking into account the disruption to working practices caused by the coronavirus, and will provide time to complete the documentation relating to the new loan facilities and the replacement financial covenant tests.