Myer claims it has had a vote of confidence in its future from its lenders after the retailer announced it has completed the refinancing of its bank credit facility.
The deal, which was flagged on September 12, confirms that the maturity on the facility has been extended until February 2021.
In the September 12 announcement, Myer said it had signed a binding term sheet and yesterday’s announcement marks the completion of the refinancing.
The news saw the shares end down 1.2% at 4.05. The announcement came at the start of what will be a rough week for the troubled department store giant.
Its annual meeting is on Friday, a day after the AGM for Premier Investments, the company controlled by Solomon Lew and Myer’s biggest shareholder.
Myer Chief Financial Officer, Nigel Chadwick, said: “I am delighted to have completed the refinancing.
“It ensures ample liquidity, relaxed covenant conditions, and a stable financial platform to improve the financial performance of the business,” Mr. Chadwick said.
Myer Chairman, Garry Hounsell, said in the statement: “This is a strong vote of confidence in Myer’s Board, its skilled executive team and, importantly, our Customer First Plan.
“Importantly, this facility gives us further confidence and ability to deliver our Customer First Plan to create shareholder value and turn around the Business; not through promises but through execution and delivery.
“Under the facility, we have further confidence and ability to set our strategic direction, including paying dividends when we meet financial covenants and it is prudent to do so, and market standard security which allows Myer to trade its business as normal,” Mr. Hounsell said.
In a statement yesterday afternoon Mr. Lew was typically dismissive, saying “Garry Hounsell has today handed the Myer keys to the big banks”.
“The failed Myer Board’s capitulation to the big banks means there is no ability to invest in the business, and no ability to pay a dividend to shareholders for the foreseeable future,” Mr. Lew said.
The truth is that if Myer had not been able to report a completion of the funding, Mr. Lew would have been just as critical, possibly more so.
Premier’s 11% stake cost around 41.14 a share, so the losses on the Myer play remain substantial.
