17th Jul 2013 07:00
17 July 2013
Micro Focus International plc
New Banking Facility
The Directors of Micro Focus International plc ("Micro Focus" or "the Group", LSE: MCRO.L), are pleased to announce the agreement of a new banking facility on improved terms with an enlarged group of banks comprising Barclays Bank plc, Clydesdale Bank plc, HSBC Bank plc, Lloyds TSB Bank plc, Santander UK plc and The Royal Bank of Scotland plc.
The new $420 million four year revolving credit facility ("RCF") will replace the existing $275 million revolving credit facility with Barclays Bank plc, Clydesdale Bank plc, HSBC Bank plc, Lloyds TSB Bank plc and The Royal Bank of Scotland plc which was due to expire in December 2014.
The interest on the new facility will be at the London Interbank Offered Rate (LIBOR) plus a margin based on net debt to RCF EBITDA multiples and compares with the previous facility as follows:
Net debt to RCF EBITDA multiple | New Facility | Existing Facility |
Greater than 2.5 x | 2.90% | N/A |
Greater than 2.0 x to less than or equal to 2.5 x | 2.40% | N/A |
Greater than 1.5 x to less than or equal to 2.0 x | 2.15% | 2.35% |
Greater than 1.0 x to less than or equal to 1.5 x | 1.90% | 2.10% |
Less than or equal to 1.0 x | 1.65% | 1.75% |
The financial covenants are: (1) EBIT to interest cover ratio of a minimum of 4 to 1 and (2) Net Debt to RCF EBITDA ratio not to exceed 3 x for the duration of the facility. Where a special dividend or a share buy-back is to be made, the company must certify to the facility agent that the projected ratio of net debt to EBITDA on a 12 month look forward and 12 month look back basis will not exceed 2.5 x.
As at 30 April 2013 the Group had Net Debt of $177.7 million and a Net Debt to Adjusted EBITDA ratio of 0.94 times, and Gross Debt of $215.6 million. The new facility will be initially utilised to repay the outstanding Gross Debt under the existing facility which today stands at $193.0 million. As previously stated, the Group has a target Net Debt to Adjusted EBITDA ratio of 1.5 x and in the absence of a significant acquisition, share buy-back opportunities or unforeseen circumstances, the Group will make further returns of value to shareholders in November 2013 and November 2014 to achieve that target ratio.
Enquiries
Micro Focus | Tel: +44 (0)1635 565 200 |
Kevin Loosemore, Executive Chairman | |
Mike Phillips, Chief Financial Office | |
Tim Brill, IR Director | |
Powerscourt | Tel: +44 (0)20 7250 1446 |
Giles Sanderson | |
Nick Dibden | |
Sophie Moate |
About Micro Focus
Micro Focus, a member of the FTSE 250, provides innovative software that helps companies to dramatically improve the business value of their enterprise applications. Micro Focus Enterprise Application Modernization, Testing and Management software enables customers' business applications to respond rapidly to market changes and embrace modern architectures with reduced cost and risk.
RCF EBITDA is calculated as Adjusted EBITDA plus Amortisation of Capitalised Development Costs.
Adjusted EBITDA is calculated as EBITDA before Exceptional Items, Share Based Compensation and Amortisation of Capitalised Development Costs.
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