Distribution Finance agrees waiver terms with lenders

Distribution Finance updated the market on talks with its lenders on Monday, having looked for a temporary waiver amid the ongoing Covid-19 coronavirus pandemic.

The AIM-traded firm had said on 28 April that it was in “ongoing constructive dialogue” with its senior and senior mezzanine facility lenders, in a bid to agree a temporary waiver of an early amortisation provision in its facilities, to 30 June.

It said on Monday that specific terms and covenants had now been agreed with the lenders, to support the loan book during the waiver, which expires on 30 June.

“Both the lenders and the company continue to monitor the emerging economic landscape alongside the plans and trading patterns of dealers and manufacturers in the post-lockdown period,” the board said in its statement.

“In light of the specific terms of the waiver, whilst allowing the company to support modest levels of new lending to its existing customer base, it is expected that, as previously announced, the loan book balance will reduce in the near-term.”

Distribution Finance said it would provide further information on its future funding strategy at its full year results in early June.

The AIM-traded firm had said on 28 April that it was in “ongoing constructive dialogue” with its senior and senior mezzanine facility lenders, in a bid to agree a temporary waiver of an early amortisation provision in its facilities, to 30 June.

It said on Monday that specific terms and covenants had now been agreed with the lenders, to support the loan book during the waiver, which expires on 30 June.

“Both the lenders and the company continue to monitor the emerging economic landscape alongside the plans and trading patterns of dealers and manufacturers in the post-lockdown period,” the board said in its statement.

“In light of the specific terms of the waiver, whilst allowing the company to support modest levels of new lending to its existing customer base, it is expected that, as previously announced, the loan book balance will reduce in the near-term.”

Distribution Finance said it would provide further information on its future funding strategy at its full year results in early June.