Pub and restaurant operator Mitchells & Butlers has been granted a temporary waiver on its secured finance, having warned that the ongoing UK lockdown during the coronavirus pandemic could see it breach the arrangements.
The company, whose businesses include Toby Carvery, All Bar One and O’Neill’s, said all of its properties have now been closed for three weeks during the UK lockdown, and that it has taken several steps to cut costs during the crisis.
These include putting more than 99% of staff on furlough and stopping all discretionary expenditure.
“It is possible that the forced closure of our sites, as required by the government, could amount to a technical breach of our secured financing arrangements,” the company said. “But, as a first step, we are announcing today that a temporary waiver until 15 May has now been granted to avoid this pending further discussions.”
The company added: “Great uncertainty remains not only as to the extent of the current shutdown but also the profile of any reopening and recovery period back to normality. In light of this, the group is in close contact with stakeholders, with whom it has strong relationships and who are supportive of the long-term fundamentals of the business.”
Revolution Bars Group
Fellow bar operator Revolution Bars Group said today that it has struck a new credit line with NatWest.
The company’s £21m revolving credit facility was due to lower to £18m at the end of June, but NatWest has now agreed to increase it to £30m until the end of August, after which it will step down to £24m.
Revolution also said NatWest has agreed to waive financial covenant tests for March and June.
“Given the prevailing level of uncertainty regarding both the timing of being able to reopen the group’s bars and the trading environment in the post Covid-19 period, NatWest has indicated it will review both the amount of available facility and the covenant tests applicable from the end of September 2020 by reference to the group’s updated trading forecasts closer to that date,” the company said. “However, as demonstrated by the agreed increase in the facility, they remain supportive of the group.”
Chief executive Rob Pitcher said: “We welcome and are delighted with the additional support from NatWest at this difficult time. They have acted as a true partner to our business and this decisive action has enabled us to be another step closer to being well-positioned to emerge from this crisis.”
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