El Corte Inglés has closed with the bank the refinancing of 2,600 million euros of debt. The agreement, signed with a score of entities, allows the return terms to be extended until March 2027, with the possibility of an extension of two years and, according to the distribution group, entails an improvement in current conditions. The company thus manages to take a breather after registering the first losses in its history in 2020 (the last annual exercise with published accounts).
The entry of the Mutua Group in the capital has paved the way to renegotiate with the banks an improvement of the debt. The operation, announced in October, includes the purchase of 8% of El Corte Inglés for 555 million and the acquisition of half of the insurance division of El Corte Inglés for another 550 million, for which the total amount amounts to 1,105 million, most of which will be used to reduce debt. Although this amount has not yet been disbursed, given that the transaction is pending the pertinent administrative authorizations, it has given a boost to the renegotiation capacity of the company chaired by Marta Álvarez.
The agreement reached with the bank supposes the total refinancing of the previous contract, signed in 2020, to which is added a new tranche of 600 million that will be used to amortize bond issues in the capital market, as indicated this Friday by El Corte Inglés it’s a statement. The operation is structured in a long-term loan of 919 million and a line of credit of up to 1,081 million.
The department store chain closed the year of the pandemic with unprecedented losses of 2,945 million euros, including provisions and impairments of 2,500 million. Its fiscal year (which runs from March to February) was greatly impacted by the confinement and subsequent restrictions. Total debt ended the year at 3,811 million.
In the first fiscal semester of 2021 —between March and August—, the group improved revenues by 25%, to 5,503 million euros, but without specifying the evolution of the net result. The debt closed that period with a growth of 129 million, up to 3,940 million, according to the group. The full year closed on February 28 and the results will be published in a few months, which are expected to represent a significant improvement after the black year of the pandemic.
At the last Shareholders’ Meeting, held in July last year, a strategic plan was approved for the 2021-2026 period to recover profitability. The goal is to achieve a gross operating result (Ebitda) of 1,700 million in five years, reduce debt by 60% and multiply sales on-line up to 30% of your billing. Debt reduction requires continuing to divest non-strategic assets. To do this, the company launched a plan last year to get rid of some of its less profitable properties and centers.
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