Forecourt retailer Applegreen has increased its available funding, securing its liquidity for what it says is the likely duration of the Covid-19 crisis.
The company said it had completed a process that converted €52.5 million of the accordion facility in its existing Applegreen banking facilities into its revolving credit facility. That represents an increase to the committed funding available for the remaining term through to October 2023.
But Applegreen said it believed it would not need to call on the additional facilities, saying it have enough cash to make it through the current difficult period, and the extra cash provided it with “headroom”.
“We reiterate our view that we have sufficient cash to get us through this cycle based on a scenario where movement continues to be severely restricted to the end of May with the expectation that restrictions will then ease gradually before normalising in Q4,” Applegreen said in a statement. “ We also expect to have adequate existing cash resources to trade through a downside scenario where the recovery period is more prolonged, to the end of 2021.”
The group said Applegreen’s lenders have also agreed to relax or remove covenant conditions for the tests arising in each quarter up to June 2021.
Applegreen said it expected to reach a similar conclusion with lenders of the Welcome Break banking facilities. The group said the UK business had been most heavily impacted by the ongoing pandemic, with the core Applegreen estate in the Republic of Ireland, UK and US is performing ahead of original assumptions at the beginning of the crisis.
In March, the company warned of a decline in profits for its current financial year due to the Covid-19 outbreak. Applegreen temporarily laid off 4,800 employees across Ireland and Britain, and said it was deferring planned capital expenditure and would take additional measures to conserve cash as it sought to deal with the impact of the coronavirus outbreak.
The group said the board had agreed to a 20 per cent cut in executive director salaries from 1st April 2020 for three months, with temporary graduated salary cuts for support staff across the organisation.
