Polish retail chain Eurocash Group has concluded loan agreements worth PLN 1 billion (€220 million) with a consortium of eight banks.
The agreements comprise a five-year term loan worth PLN 456 million (€102.4 million), a three-year revolving loan worth PLN 445 million (with an option to extend), and a three-year overdraft facility up to PLN 100 million (€22.5 million), the company said in a statement.
Paweł Surówka, president of the Eurocash Group said, "The group of six banks that co-financed the activities of the Eurocash Group in the last three years has been joined by two more.
"This proves that the financial market trusts our company, its improving financial results and the direction of further development chosen in the strategy. Extending the maturity of the term loan to five years provides us with stability and greater flexibility in doing business."
General Corporate Goals
Eurocash Group added that it can use these funds to finance general corporate goals, and current needs related to working capital, including refinancing existing debt under loans and credits taken out in 2020, or financing the development of franchise networks.
The consortium of banks includes Alior Bank, Bank Gospodarstwa Krajowego, Bank Ochrony Środowiska, BNP Paribas Bank Polska, Bank of China (Europe) Branch in Poland, European Bank for Reconstruction and Development, mBank and Santander Bank Polska.
Eurocash Group's net debt at the end of the first quarter of this year was 1.2 times the EBITDA result for the last 12 months, which it says was its lowest debt ratio in recent years.
The concluded agreements have the provision for an increase in this ratio to a maximum level of 3.5x, but the company aims to maintain it at a level below 1.5x in this period.
Surówka added, "In an environment of high-interest rates, we are systematically reducing our debt to reduce financial costs. We intend to maintain this direction in the coming quarters, while the new financing provides us with security and great comfort of conducting business, also in the event of possible market turbulence."