Wasps receive backing from bondholders to amend covenants
Wasps Group, which includes the rugby union club, stadium operators Arena Coventry and events company IEC Experience, has announced that bondholders have voted to support the amendments to covenants that will take into account the impact of the ongoing Covid-19 restrictions on the Group’s performance and outlook.
The club’s parent company needed permission to be able to borrow any money if required to allow it to “trade as a going concern while the Government’s public health restrictions to control COVID-19 remain in place”.
Wasps received in excess of the required amount votes in support of the proposals which were approved at the adjourned meeting held on Thursday morning (November 12). Although Wasps had received sufficient votes to approve the proposals at a previous meeting on October 29, not enough bondholders had voted ahead of the meeting’s deadline.
The proposals include:
· Removing the requirement to maintain a minimum Consolidated EBITDA to Consolidated Finance Costs ratio
· Allowing the Group to draw on the Interest Service Reserve Account, removing the Required Account Balance
· Giving the Group the ability to access further liquidity, if required, increased by £10m included in the £50m total consolidated senior debt limit in the short-to-medium term future
· Maintaining the Secured Asset Cover Ratio protection for Bondholders
· Allow access to limited non-recourse debt for the purposes of the Arena development plan
· Permitting the Group to redeem the Bonds without paying a premium at any time after 13 November 2020 (ahead of the May 2022 maturity date)
Stephen Vaughan, chief executive, said: “We thank bondholders for voting in favour of the proposals. This significantly strengthens our ability to meet the current challenges presented by Covid-19, and will enable the Group to emerge in a more robust financial position once restrictions are lifted. We remain ready with a comprehensive reopening strategy in place for when guidance permits and we thank all of our stakeholders, including our bondholders, for their continued support during this time.”
Wasps says the approval will enhance its ability to withstand the impact of Covid-19 and support its plans to refinance the Bonds on or by their scheduled maturity date. The proposals also remove the current leverage covenants which now enables the Group to accept any appropriate Covid-funding schemes put forward by Premier Rugby Limited.
