Chains maker extends banking facilities and welcomes new funder
Renold, the Manchester-based international supplier of industrial chains and power transmission products, has extended its core banking facilities that were due to mature in April 2024.
The new, £85m multi-currency revolving credit facility will be increased from the previous level of £61.5m.
Also, there is a £20m accordion option which will allow the company to access additional funding in support of its acquisition programme as part of the group’s STEP2 strategy.
The new facilities will be provided by Renold’s existing banks HSBC, Allied Irish Bank (GB) and Citibank with the addition of Santander and are initially for a three year term, to May 2026, but contain an option to extend the term for a further two years.
The principal facility term, the net debt/EBITDA covenant, will be extended from the previous level of 2.5 times EBITDA to 3.0 times EBITDA, with other key terms remaining unchanged.
Robert Purcell, Renold chief executive, said the new banking facilities will provide a stable financing platform to support the continued strategic development of the group over the next few years.
He added: “As part of the facility extension, we welcome a new lending partner to the syndicate which complements Renold’s extensive geographic reach and can help support our operations across the world.”
In February this year, Renold said it expects to make increased profits for the full year on turnover for the 10 months to January 31, 2023, of £199m (10 months to January 31, 2022: £158.7m), 25.4% higher than the prior year comparator on a reported basis, and 17.3% at constant exchange rates.
In a statement at the time, Renold said: “Given the continued sales growth, a strong orderbook, benefits of the cost reduction and efficiency programmes, and the successful recovery of cost inflation on raw material and energy, the board is confident the current trading momentum will deliver revenues and underlying operating profit for the full year in excess of market expectations.”
