Saga targets £170m to steer course via pandemic | Enterprise Information
Saga, the over-50s journey and insurance coverage specialist, is in talks a couple of £170m debt package deal because it seeks to chart a course via the rest of the coronavirus pandemic.
Sky Information has learnt that the corporate, which rebuffed a takeover method final yr, has kicked off talks with a bunch of debt funds about refinancing a part of its current borrowings.
Metropolis sources stated this weekend that Saga was contemplating attempting to safe the brand new debt towards its insurance coverage arm – the stronger of its two companies after a yr wherein its cruise operations have been largely dormant.
The talks with current potential lenders are a way from being concluded, in keeping with insiders, and will not end in a deal.
Saga indicated in a buying and selling replace final month that it was taking further steps to shore up its funds due to uncertainty over the timetable for resuming its journey operations.
“While the group has important liquidity and headroom to the present covenants in brief time period financial institution services, given the backdrop of continued disruption to the journey enterprise, we’re taking actions to additional improve monetary flexibility.
“Now we have commenced constructive discussions with lenders, who stay supportive.
“We’re reviewing the covenants connected to our time period mortgage and RCF, to extend flexibility forward of the resumption of journey.”
The faster-than-expected tempo of the UK authorities‘s COVID-19 vaccination programme has fuelled hopes that restrictions on the journey and hospitality sectors will likely be lifted effectively earlier than the summer time.
Boris Johnson is because of set out a extra detailed “roadmap” in an announcement on Monday.
Saga stated just lately that cruise prospects must be vaccinated earlier than being allowed to embark, making it one of many first main British firms to make such a stipulation.
Its talks with debt suppliers come almost six months after it raised about £150m from shareholders to assist fund its restoration.
As a part of that deal, Saga’s former chief government, Sir Roger de Haan, took a giant stake within the firm and returned to its boardroom as chairman.
Sir Roger offered Saga for £1.3bn in 2004, leaving the corporate saddled with a giant debt-pile underneath its non-public fairness backers.
Saga’s shares proceed to commerce at a giant low cost to the valuation implied by a proposal from two US-based buyout corporations final summer time.
Mark Wilson, the previous Aviva chief government, was lined as much as spearhead the deal and set up himself in a high function.
The corporate is now run by Euan Sutherland, the previous chief government of Superdry and – briefly – the Co-operative Group.
In 2019, Saga disclosed that Elliott Advisers, the activist hedge fund supervisor, had taken a 5pc stake, prompting expectations of a break-up or different company exercise.
The corporate stated final month that it had made important progress towards a sequence of latest company goals.
Saga declined to touch upon Sunday.