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Esplanade retailer Applegreen has increased its available funding, securing its liquidity for what it says is the likely duration of the Covid-19 crisis.
The company said it had completed a process that converted € 52.5 million from the accordion facility at its current Applegreen banking facility into its revolving credit facility. That represents an increase in available committed funds for the remaining period through October 2023.
But Applegreen said it believed it would not need to resort to the additional facilities, saying it had enough cash to overcome the current difficult period, and the additional cash gave it “wiggle room.”
“We reiterate our view that we have enough cash to carry us through this cycle based on a scenario in which movement continues to be severely restricted until the end of May with the expectation that the restrictions will be gradually eased before normalizing in the fourth quarter. “Applegreen said in a statement. “We also expect to have adequate existing cash resources to trade through a downside scenario where the recovery period is longer, until the end of 2021.”
The group said Applegreen lenders also agreed to relax or remove covenant conditions for tests that emerge in each quarter through June 2021.
Applegreen said it hoped to reach a similar conclusion with lenders at the Welcome Break banking facility. The group said that the UK business had been badly affected by the ongoing pandemic, and that Applegreen’s core wealth in the Republic of Ireland, the UK and the United States is performing ahead of the original assumptions at the start of the crisis.
In March, the company warned of a decrease in earnings for its current financial year due to the Covid-19 outbreak. Applegreen temporarily laid off 4,800 employees in Ireland and Britain, saying it was deferring planned capital expenditures and that it would take additional steps to conserve cash while trying to cope with the impact of the coronavirus outbreak.
The group said the board agreed to a 20% cut in executive director salaries starting April 1, 2020 for three months, with temporary graduated salary cuts for support staff across the organization.
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