14th May 2020 11:42
(Alliance News) - Brewer and pub operator Marston's PLC on Thursday said it has secured an additional GBP70 million through an increased bank facility to ensure that the company is "best placed to navigate this period of uncertainty" created by the Covid-19 pandemic.
The travel and hospitality sector - pubs, bars, restaurants, hotels, cruise and airlines - has been the hardest hit by the pandemic, being forced by governments around the world to close their operations to control the virus spread. The sector has shed thousands of jobs and sought government help to stay afloat.
"We believe that this additional 180 day financing facility, together with ongoing government support on employment costs, deferred tax payments and rent and rates relief, as well as continued income from beer sales into the off-trade, provide us with sufficient liquidity to meet our obligations beyond the end of the financial year even if pubs were closed until then," Marston's said.
The FTSE 250-listed company's financial year ends on September 28.
The company, which has temporarily closed all of its 1,350 pubs due to UK government restrictions, has additionally secured amendments from lenders over banking covenants tests for September 2020 and March 2021. It is separately seeking a limited number of technical waivers and amendments to its bonds.
Further, in order to conserve cash, Marston's has decided to cancel dividend payouts for 2020, and its board of directors have volunteered significant cuts in pay and fees for the time being.
Marston's said the temporary closure of its pub estate and the additional GBP70 million liquidity will set back the company's debt reduction "trajectory"; however, it remains committed to reduce leverage over the medium term.
The Wolverhampton-based company noted the UK government's plan to reopen pubs in early July, but said that it is awaiting more clarity from the government.
"However, this timing is by no means certain and is, of necessity, subject to meeting targets relating to containing the virus and the ability to meet Secure Covd-19 guidelines," Marston's said.
Shares in the company were down 1.1% at 29.66 pence each in London on Thursday morning.
By Tapan Panchal; [email protected]
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