Enterprise Inns plc (the “Company”) is pleased to announce a new Forward Start Facility (“FSF”) of £220m which will commence on expiration of the existing facilities on 16 December 2013. The facility was coordinated by Deutsche Bank and the Royal Bank of Scotland with Barclays, BNP Paribas, HSBC, Lloyds Banking Group, Santander and Scotiabank joining as Arrangers and is committed through to 15 December 2015 (Facility A: £70m) and 15 June 2016 (Facility B: £75m and Facility C: £75m).
The FSF secures a refinancing package which will allow the Company to follow its strategy of bank debt reduction which has seen the group reduce its facilities from £1.1bn in 2008 to a current level of £446m of which £389m is drawn net of cash. The size of the FSF is based on the Company's strong cash generation and the disposal plan as set out in our half year results statement of 15 May, in which the Company stated that for the year to September 2012 it expects to deliver total disposal proceeds of around £200m, followed by a further £150m next year.
The Company believes it has secured competitive pricing for the FSF, with initial margins commencing at 5.0% over Libor on Facility A and 4.5% over Libor on Facilities B and C. The financial covenants include net debt to EBITDA and interest cover at the same levels as the existing facility and a fixed asset cover of 1.33 times.
During the period to 16 December 2013 the Company will incur an incremental interest charge of 100bps on £220m of its existing facilities which will result in an estimated incremental interest cost of £0.8m in the year to September 2012 and £2.2m in the year to September 2013.
Once tranche B of the existing facility is fully repaid there will be no restrictions upon the Company’s ability to pay dividends.
Ted Tuppen, Chief Executive commented:
"We are very pleased to announce the signing of our Forward Start Facility, which reinforces the support of our banking group and demonstrates the proactive steps we have taken to address the financing plans for the business. The successful signing of this facility allows us to focus on further improving the operational performance of the business and delivering long term value to our shareholders."
Tulchan Communications, Ed Orlebar/David Allchurch 0207 353 4200
Ted Tuppen, Chief Executive 0121 733 7700
Neil Smith, Chief Financial Officer 0121 733 7700
Emma Greves, Investor Relations Manager 07990 550210