Melrose Industries PLC

Capital/Financing Update • Aug 4, 2020

National Storage Mechanism | Additional information

RNS Number : 0505V

Melrose Industries PLC

04 August 2020

MELROSE INDUSTRIES PLC

4 August 2020

FINANCING UPDATE

Melrose Industries PLC ("Melrose" or the "Group") today issues an update on financing.

Following the trading updates on 30 March 2020 and 22 July 2020, Melrose has now agreed amended arrangements with its banking syndicate including improved financial covenants to 31 December 2022.  Beyond that date the Group reverts to the original covenants for the balance of the facilities' term.  These amendments cover all the Group's primary borrowing arrangements that contain financial covenants.

The Group's committed c.£3.2 billion revolving credit facility is repayable in January 2023 and the Group's committed term loan of c.£0.9 billion can be extended to April 2024 at Melrose's option.  In addition to these committed banking lines the Group has two bonds: a £450 million bond maturing in September 2022 and a £300 million bond maturing in May 2032, neither of which contain financial covenants.

Melrose is grateful for the continued support of its lending banks which means that it has the flexibility it needs to continue to focus on cash generation and adapting the Group to current market conditions.  The new financial covenants have been designed to give Melrose considerable headroom and flexibility.

There is a modest cash cost to secure this amendment but there is no change to previously agreed interest rate calculations.  Melrose has passed its covenant tests for 30 June 2020 and would not in fact have needed the net debt: EBITDA waiver granted previously. 

The improved financial covenants are shown in the table below:

Financial Covenant	31 December 2020	30 June 2021	31 December 2021	30 June 2022	31 December 2022
Net debt :EBITDA	Waiver*	Waiver	5.25x**	4.75x**	4.0x**
EBITDA :Net finance charges	2.5x	3.0x	3.0x	3.25x	4.0x

*Announced on 30 March 2020

**Subject to downward adjustments upon certain material disposals

Following 31 December 2022, the financial covenants revert to 3.5x (for net debt: EDITDA) and remain at 4x (for EBITDA: net finance charges). 

Simon Peckham, CEO of Melrose Industries PLC, said:

"We have now put in place new amended arrangements with our banks that last until the end of 2022.  We thank our banks again for their continued support which gives us the headroom and flexibility to continue to focus on cash generation and adapt the Group as needed.   Melrose also retains over £1 billion of cash liquidity.  We are confident that we can position the Group to produce good returns for Shareholders."

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Enquiries:

Montfort Communications:	Nick Miles
	+44 (0) 20 3514 0897
	+44 (0) 7973 130 669
	miles@montfort.london
	Charlotte McMullen
	+44 (0) 20 3514 0897
	+44 (0) 7921 881 800
	mcmullen@montfort.london
Melrose Investor Relations:	+44 (0) 7974 974690
	ir@melroseplc.net

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