18th Jun 2020 10:05
(Alliance News) - Stagecoach Group PLC on Thursday said it has agreed to a covenant waiver, a boost for the bus operator just a day after it was struck a blow in a UK contract dispute.
The FTSE 250 firm said it has agreed with its lenders a covenant waiver for the periods ending October 31 this year and May 1 next year. The waivers are for its lending facilities which expire on March 2025.
Instead of covenants during the periods, Stagecoach explained it will agreed "minimum liquidity thresholds" instead.
The company added: "The group has strong liquidity, with available cash and undrawn, committed bank facilities of over GBP800 million."
Stagecoach on Wednesday said it was "disappointed" by the UK High Court's decision to dismiss the company's claims against the UK Secretary of State for Transport regarding decisions to disqualify the company from three rail franchise competitions.
Stagecoach in April 2019 had launched a legal action against the UK government after the company and its partners were disqualified from bidding for three rail franchise contracts - the East Midlands line, the expanded West Coast intercity service and the South Eastern franchise.
The UK government had barred Stagecoach from bidding for the three rail contracts citing non- compliance mainly relating to pensions risks.
Stagecoach, in its court claim, had alleged that the UK Department of Transport breached its statutory duties in connection with the procurement of the ongoing competition for the rail contracts.
Stagecoach shares were 5.6% higher at 70.35 pence each in London on Thursday morning.
By Eric Cunha; [email protected]
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