German Federal Government approves syndicated loan for Ceconomy AG
Germany’s Federal Government has approved the application of Ceconomy AG, the parent company of Media-Saturn, for an Euro a 1.7 billion syndicated revolving loan facility with the participation of the country’s state-owned KfW bank. The yet to be concluded credit agreement is, inter alia, still subject to the approval by a consortium of the company’s partner banks. “Positive talks” with these banks were “at an advanced stage”, Ceconomy said in a press release.
One condition of the syndicated loan is that Ceconomy de facto suspends dividend payments for the duration of the credit facility, which is to be set until December 2021 with a one-year extension option at the discretion of KfW. Ceconomy pointed out that in view of the worldwide spread of the COVID-19 pandemic and the expected effects on its business, the company had early initiated extensive action to safeguard ist liquidity, including, as a precautionary measure, the application for this credit line as a working capital facility to increase the existing credit agreements of Euro 980 million to secure the company’s financial flexibility.