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Scapa gets £15 million 12-month facility, temporary covenant changes
By Wendy Van Sickle
Columbus, Ohio, May 14 – Scapa Group plc said it received approval from its lenders for a new £15 million 12-month facility, according to a news release.
The new facility is in addition to the company’s existing £80 million revolver.
The group said it is executing a Covid-19 action plan focused on cash management and preserving liquidity. Scapa expects it revenues will be substantially impacted by the pandemic, particularly in the first quarter of its 2021 fiscal year and in early the second quarter of its 2021 fiscal year.
The group also announced it has received approval from its lender to suspend testing of its revolver’s leverage covenant, which sets a maximum ratio of total net debt to adjusted EBITDA of 3:0, until March 2021.
The existing covenants also include an interest cover covenant, requiring a minimum ratio of adjusted EBITDA to net finance charges of 4:1.
Until the date on which the group returns to compliance with the two existing covenants, it is expected that the existing interest cover covenant will be tested quarterly and two additional financial covenants will apply.
The new temporary covenant tests, which are tied to the group's Covid-19 scenario, will apply to both the existing revolver and the additional debt facility.
The temporary covenants include a minimum EBITDA test and a liquidity test, tested quarterly.
Additionally, there is a requirement that capital expenditure does not exceed 110% of the amount forecast in the Covid-19 scenario.
Under its Covid-19 scenario, the croup is expecting to generate revenue of around £272 million in fiscal year 2021, about 80% of the previously budgeted revenues for the year, and to generate about half of the trading profit that was originally forecast in management's pre-Covid-19 budget for the 2021 fiscal year.
Ashton-under-Lyne, U.K.-based Scapa is a diversified health care and industrial group.
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