McBride keeps €175 million sustainability revolver, delays covenants

By Marisa Wong

Los Angeles, Sept. 29 – McBride plc announced amendments to its financing agreements in a company news release on Thursday.

The group’s €175 million sustainability-linked revolving credit facility remains in place to its original maturity date of May 2026.

However, there will be no covenant tests until September 2024, other than a liquidity limit that has been reduced to £15 million from the £40 million in place since the company’s first covenant waiver in December 2021.

As part of this arrangement, the lender group has been granted a security package over assets and investments, and there is a modest and progressive step down in the revolver commitment from September 2024.

Additionally, the invoice discounting lines, totaling £83 million, have been extended and committed to September 2024.

The key provisions of the revised agreement are as follows:

• The revolver is to be secured against material assets, shares and intercompany balances, subject to a mutual agreement to review the continuing requirement for security once the group is in compliance with the financial covenants listed below;

• Commitments to reduce in the amount of the euro equivalent of £2.5 million every three months from September 2024 up until the maturity date;

• Overdrafts of £5 million and €15 million will become ancillary facilities under the revolver, committed until Sept. 30, 2024;

• Invoice discounting facilities are committed to Sept. 30, 2024;

• Liquidity is not to be less than £15 million on or prior to Sept. 30, 2024 or less than £25 million after that;

• Net debt cover, to be tested quarterly from Sept. 30, 2024, must not exceed 3 to 1 for Sept. 30, 2024 and Dec. 31, 2024 or 2.75 to 1 after that;

• Interest cover, to be tested quarterly from Sept. 30, 2024, is to be no less than 3.4 to 1 for Sept. 30, 2024, no less than 3.9 to 1 for Dec. 31, 2024, to be no less than 4 to 1 for March 31, 2025 and June 30, 2025 and to be no less than 4.25 to 1 after that;

• No dividends will be paid to shareholders until the revolver is refinanced (at maturity or earlier);

• No increase in margin is applicable to borrowings when debt cover is 2.5x or lower;

• When debt cover is 2.5x or higher, the margin applicable to borrowings rises by 35 to 235 basis points, depending on debt cover level; and

• The arrangement includes an “upside sharing” mechanism. The group must, subject to some exceptions, pay a fee to members of the lending group upon the occurrence of an exit event (e.g., change of control or a prepayment or repayment in full of the facility). The fee equals 11% of any increase from the current market capitalization of the group to the market capitalization of the group at the date of the exit event.

McBride is European manufacturer and supplier of private label and contract manufactured products for the domestic household and professional cleaning and hygiene markets.

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