Network International Holdings PLC Network International Holdings Plc business update (5483I)
02 April 2020 - 5:00PM
UK Regulatory
TIDMNETW
RNS Number : 5483I
Network International Holdings PLC
02 April 2020
Network International Holdings Plc
Business update and announcement of successful refinancing
2(nd) April 2020
Network International Holdings Plc (LSE: NETW), the leading
enabler of digital commerce across the Middle East and Africa,
provides a business and financing update.
Balance sheet and successful refinancing
The Group has a strong balance sheet, ending the financial year
2019 with a leverage ratio of 1.6x net debt: underlying EBITDA.
We have successfully refinanced our syndicated lending facility,
as previously indicated at the time of our full year results
release. The syndicate, which consists of 16 banks both global and
regional, was considerably over subscribed, with around half of the
facility funded by banks who are new to the syndicate. This is
testament to our strong business fundamentals in the current
challenging credit environment.
The purpose of the facility is for general corporate use, and in
the mid to longer term, to fund growth accelerator projects. The
facility is for USD525 million and replaces the Group's USD350
million financing facility, which had a drawn down balance of
USD289 million on 31 December 2019. The new facility carries
interest rates at similar levels to the previous facility; at
current leverage, there is an interest rate of LIBOR +2.2% on the
USD tranche and EIBOR +1.95% on the AED tranche. Financial
covenants remain the same as the previous facility, at 3.5x net
debt: underlying EBITDA*. The facility has a tenure of six years,
with repayments commencing in 2022. Capitalised fees associated
with the previous facility will be reflected as an impairment
charge to the income statement of approximately USD7 million in
2020.
*The net debt definition does not include overdraft facilities
used to fund settlement related working capital requirements
Business operations update
We have continued to assess the impact of COVID-19 in recent
weeks and actioned plans to protect the safety and wellbeing of our
colleagues and customers. We made an early and phased
implementation of working from home across the business, which has
enabled a seamless transition in working practices. With the
investments we have made in our technology platforms over recent
years and the dedication of our teams, our business operations,
processing and payments activities continue to operate as normal.
We are also committed to supporting our customers, particularly
SMEs, who we have offered reduced merchant fees, support in
transitioning their businesses online, and USD1 million in cash to
1000 small merchants who have been particularly impacted.
As previously announced, COVID-19 is affecting global travel and
spending patterns. In recent days, social distancing and lock-down
measures have been implemented in a number of our markets, similar
to those that have been put in place internationally. As a result,
our Merchant Acquiring volumes in a number of segments have been
significantly impacted. We expect our Issuer Solutions business to
be more resilient, with a proportion of fixed revenue contracts
that will cushion the impact from lower volumes.
Cashflows and management actions
Given the uncertainty surrounding the length of the COVID-19
impact, we are currently taking actions to reduce operational
expenses across the business without reducing headcount; we are
committed to supporting our people and believe they are the core
driver behind our successful business. We will also be selective
about the choices we make and the timing of capital expenditure, as
a sensible and precautionary approach to managing cashflows.
Dividend
In addition to these mitigating steps, we believe it is prudent
to defer the payment of a dividend in respect of the 2019 financial
year, until we have greater clarity on the operating
environment.
Conclusion
Alongside the actions we are taking to protect the business in
the current environment, we have stress tested our business
outlook. Even in a prolonged COVID-19 scenario, we would retain
significant liquidity with our currently available facilities.
We are a diversified payments business operating across the
acquiring and issuing value chain, as an essential partner to over
70,000 merchants and 200 financial institutions, throughout the
Middle East and Africa. The business has a highly successful track
record, having operated for twenty five years in the region, with
consistent high growth in volumes. We remain confident in our
ability to navigate through this period and the long term
fundamentals remain strong, supported by secular tailwinds of cash
to digital payments conversion across our regions.
Network International plans to release a Q1 2020 trading
statement on 30(th) April 2020.
Investor Relations enquiries
Network International InvestorRelations@Network.Global
Amie Gramlick, Head of Investor Relations
Media enquiries
Finsbury Network-Lon@Finsbury.com
Andy Parnis, Rob Allen
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END
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