TIDMCVR

RNS Number : 6962H

Conviviality PLC

14 March 2018

The information contained within this announcement is deemed by the Company to constitute inside information stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement via the Regulatory Information Service, this inside information is now considered to be in the public domain.

14 March 2018

Conviviality Plc

("Conviviality", the "Company" or the "Group")

Further Update

Further to the announcements made by Conviviality Plc on 8 March 2018 and 13 March 2018, the Company yesterday identified a payment due to HM Revenue & Customs of approximately GBP30.0 million which falls due for payment on 29 March 2018 and which has not been accrued for within its short term cash flow projections. This has created a short term funding requirement. The Company's announcement on 13 March 2018 confirmed an expected range of adjusted EBITDA of between GBP55.3 million and GBP56.4 million. To the extent that the current situation creates operational difficulties, this may negatively impact the adjusted EBITDA range.

The Company is currently in compliance with its banking covenants. The next covenant test date is 29 April 2018. The Company is subject to two banking covenants (i) for covenant debt (which excludes any amount drawn down under the Company's invoice discounting facility) to be less than 2.5 times the last 12 months adjusted EBITDA, and (ii) adjusted EBITDA to be at least 4 times the net financial charge. The Company is fully drawn under its term loans and revolving credit facility and covenant net debt at 29 April 2018 is expected to be approximately GBP113.0 million (which excludes any amount drawn down under the Company's invoice discounting facility). Based on the expected adjusted EBITDA of between GBP55.3 million and GBP56.4 million, this would give rise to a covenant test result of 2.04x to 2.00x adjusted EBITDA. The Company continues to expect net debt to be approximately GBP150.0 million for the period ending 29 April 2018 including the invoice discounting facility.

The Company has engaged PwC to assist it in its forthcoming discussions with HM Revenue & Customs and its key stakeholders including its lending banks, credit insurers, suppliers and other creditors, as well as to determine the potential impact of any resulting funding requirement on the Company's adjusted EBITDA expectation and compliance with its banking covenants. Following preliminary advice received from PwC, whilst there can be no guarantee, the Board believes this short term funding requirement will be satisfactorily resolved.

A further update will be made in due course

Temporary Suspension of Trading on AIM

Whilst the Board considers the anticipated impact of the above on the Company's funding position, the Company has applied for suspension of trading in the Company's ordinary shares on AIM with effect from 7:40 a.m. today.

 
 Enquiries: 
 Investec (Nominated Adviser        Tel: 020 7597 
  and Broker)                        5970 
 Garry Levin / David Flin 
  / Daniel Adams 
 
 FTI Consulting                     Tel: 020 3727 
                                     1000 
 Jonathan Brill / Georgina Goodhew / Fiona Walker

This information is provided by RNS

The company news service from the London Stock Exchange

END

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March 14, 2018 05:55 ET (09:55 GMT)

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