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FLEETPARTNERS GROUP LIMITED — Capital/Financing Update 2020
May 4, 2020
64940_rns_2020-05-04_435fe932-b249-44bf-85ce-67e9060412a8.pdf
Capital/Financing Update
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Level 6, 601 Pacific Highway St Leonards NSW 2065
Eclipx Group Limited | ABN: 85 131 557 901
5 May 2020
ASX Release
Market Announcements Office Australian Securities Exchange 20 Bridge Street Sydney NSW 2000
Update on Eclipx Group’s corporate debt facilities
Eclipx Group Limited (ASX:ECX, “Eclipx” or “Group”) provides an update in relation to amendments to its corporate debt facilities.
By way of background, on 25 October 2019, Eclipx entered into an agreement with its corporate lenders to amend the terms and extend the maturities of its corporate debt facilities (“October 2019 Agreement”).
Given the current operating environment, Eclipx has now sought, and been granted, a number of amendments to the October 2019 Agreement from its lending group (“Revised Agreement”).
Revised Agreement—summary of amendments
1. Covenant amendments
In the October 2019 Agreement, changes to corporate debt covenants had been agreed with the mutual objective of reducing gross corporate debt over time, which was, and continues to be, consistent with the objectives of Eclipx’s Simplification Plan.
Under the terms of the Revised Agreement, Eclipx’s lenders have agreed to amend the covenants to provide Eclipx with strategic and operational flexibility, outlined in the following table:
| On and from: | Mar-20 | Sep-20 | Mar-21 | Sep-21 | Mar-22 | Sep-22 | |
|---|---|---|---|---|---|---|---|
| Leverage | October 2019 AgreementRevised Agreement | 3.25x3.25x | 2.75x3.25x | 2.50x3.00x | 2.25x2.50x | 2.25x2.25x | 2.25x2.25x |
| ICR | October 2019 Agreement | 3.00x | 3.25x | 3.50x | 3.75x | 3.75x | 3.75x |
| Revised Agreement | 2.75x | 2.75x | 3.00x | 3.50x | 3.75x | 3.75x |
*There has been no change to the third covenant, Shareholder Funds (“SHF”), which remains as the greater of $450m or 85% of SHF as at the end of the preceding financial year. SHF is a financial statement metric defined as paid up capital and adjusted retained earnings and reserves excluding certain movements relating to Non-Core businesses. For the avoidance of doubt, there are no additional financial or non-financial covenants, and no covenants linked to either debt or equity market references.
- Amendment to the calculation of covenant ratios – removal of Non-Core EBITDA
The October 2019 Agreement included a calculation of the covenant ratios with reference to the last twelve months (“LTM”) EBITDA contribution from all Group businesses, both Core and Non-Core.
From June 2020, and under the Revised Agreement, the calculation of the covenant ratios will reference the LTM EBITDA contribution from the Core fleet business only. The amendment removes the LTM EBITDA contribution from the Non-Core businesses, being Right2Drive and CarLoans.com.au, for the purposes of calculating the covenants.
This amendment has a positive impact on Group covenant ratios and provides additional headroom during and post the COVID-19 period.
3. Calculation of corporate debt interest
There is no change to the interest cost associated with the amended corporate debt. The Group’s LTM EBITDA, including Non-Core businesses contribution, will continue to be assessed for the purposes of pricing the interest cost associated with the corporate debt facilities.
4. Liquidity
Under the Revised Agreement, Eclipx continues to have unrestricted access to a $25m revolver facility. As at 31 March, Eclipx has $80.8m in cash and cash equivalents, with total available liquidity of $105.8m at that date.
As part of the Revised Agreement, Eclipx has undertaken to prepay its September 2020 scheduled amortisation of $10m. This repayment will be made from funds that have already been prepaid, so there will be no increase in gross corporate debt. It continues to be a requirement for Eclipx to make $10m scheduled amortisations every half year until the leverage ratio is below 2.0x[1] . The next $10m scheduled amortisation is due in March 2021.
The corporate debt facility has reduced by circa 40% in the last 12 months from $350m to $225m. Eclipx continues to target its objective of $175m gross debt, notwithstanding the COVID-19 backdrop.
1H20 result
Eclipx Group intends to release its result for the first half of FY20 on 13 May 2020.
ENDS
Authorised by: Investor enquiries: Matthew Sinnamon I Company Secretary Jason Muhs I Eclipx Group T: +61 2 8973 7178 E: [email protected] T: +61 4 3874 2757 E: [email protected]
1 Scheduled amortisation and no dividend payments until net debt to adjusted EBITDA (including Core and NonCore businesses) is below 2.0x for two consecutive quarters.
2