Breathing space for Melrose after lenders agree to deal on its debts
◆ Melrose Industries, which bought GKN in a bitter £8bn takeover, has done a deal with its lenders to provide breathing space on its debt, writes Alan Tovey.
The company said the new terms gave it “the flexibility it needs to continue to focus on cash generation and adapting the group to current market conditions”.
The FTSE 100 firm has secured a further extension of a waiver on a net debt to earnings before interest, tax, depreciation and amortisation covenant to June 2021.
The ratio on net debt to ebitda charges before financing charges is also being raised from 2.5 times currently to three times until Dec 31, eventually rising to four times through to December 2022.
The changes cover Melrose’s primary borrowing arrangements of a £3.2bn revolving credit facility repayable in January 2023 and a £900m loan that can be extended to April 2024.
The firm’s interim dividend is not being paid.