SCA refinances debt facility for further three years
Southern Cross Austereo (SCA) has negotiated the refinancing of its debt facility, locking it in for a further three years.
The new facilities involve a three-year revolving $435m facility, and a one year revolving $25m facility, to be used to repay the company’s existing drawn debt of $325m.
The facilities will also be used to “provide financial flexibility to support the business going forward”, according to a statement posted to the ASX.
“We are extremely pleased with the new facilities which provide funding certainty and flexibility to grow the business,” said SCA’s CFO, Nick McKechnie.
“The transaction reflects the confidence of the banking community in our strong cash generation and in the quality asset base of SCA. We are delighted to have the continuing support of five lenders and welcome Bank of China into the syndicate.”
The debt financing has been provided by six banks, including ANZ, Commonwealth Bank, NAB, Mizuho, Sumitomo Mitsui, and Bank of China.
The refinancing will be formally completed on 8 January, 2020. Financial covenants will stay at a maximum of 3.5 times net debt: EBITDA [earnings before interest, taxes, depreciation, and amortisation], with a minimum interest cover of three times. SCA said this gives it significant headroom when compared to the ratios as at 30 June of 1.76 times and 13 times respectively.
Last week, SCA made around 90 positions redundant in the face of tough market conditions.
In October the business released a warning to the Australian Stock Exchange (ASX) in the midst of “weak media markets, and a short and volatile advertising market”. In August, SCA posted a $91.395m loss, but reported revenue was up.
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