Fuller’s to issue £100m of commercial paper under CCFF
Fuller, Smith & Turner said on Monday that it will issue commercial paper for £100m under the Covid Corporate Financing facility to ensure it’s in "a strong position with significant liquidity headroom" to weather the coming months amid the ongoing closure of its pubs.
The government’s CCFF provides funding to businesses by buying commercial paper of up to one-year maturity, issued by firms making what is deemed to be a material contribution to the UK economy.
The pub and hotel company said the move will allow it leave the majority of its £155m revolving credit facilities undrawn.
"Fuller's is well financed with a healthy balance sheet and significant liquidity headroom.
"However, in light of continued uncertainty, pending further clarity from the Government as to when and how pubs will be allowed to reopen, management have taken additional precautionary measures to ensure the company is in the best possible financial position, with maximum flexibility."
The company also said that "constructive" talks with its lending banks have led to appropriate amendments to its banking agreements. As a result, the group’s quarterly covenant tests through to and including the September 2020 test, will primarily focus on liquidity headroom metrics. This is "a more appropriate measure", it said, while its pubs and hotels remain closed due to Covid-19.
This, together with additional liquidity reserves, "further underpins the board's confidence that Fuller's has sufficient liquidity headroom to sustain the company through this period of continued uncertainty," it said.
The company had already announced that 96% of its workforce has been furloughed, while executive and board members have agreed to a voluntary pay cut.