Weir Group PLC Refinancing and Trading Update (1527R)
26 Junio 2020 - 1:00AM
UK Regulatory
TIDMWEIR
RNS Number : 1527R
Weir Group PLC
26 June 2020
New RCF and Term Loan agreed; Mining technology businesses
continue to show resilience
The Weir Group PLC confirms the completion of the ordinary
course refinancing of its main banking facilities. The Group is
also providing an update on Covid-19 and current trading that shows
the continued resilience of its mining businesses.
-- Refinancing of US$950m RCF and GBP200m Term Loan, extending
maturities to 2023 and 2022 respectively
-- Minerals orders stable sequentially in Q2 to date despite
Covid-19 restrictions; margins in normal range
-- ESCO margins remain robust despite disruption to its infrastructure markets
-- O&G still expected to be cash generative for the full
year; continuing to explore exit options
New US$950m RCF and GBP200m Term Loan agreed
The Group has completed the refinancing of its main banking
facilities, with a syndicate of 12 global banks. These facilities
comprise a new US$950m Revolving Credit Facility (RCF) which will
mature in June 2023 with the option to extend for up to a further
two years and a new GBP200m Term Loan which will mature in March
2022. The margin on the new facilities is slightly higher than
current levels reflecting market conditions but remains highly
competitive and significantly lower than the Group's existing
long-term bonds. Covenant terms remain unchanged. Both the RCF and
Term Loan replace existing facilities which were due to mature on
or before September 2021.
The Group continues to be highly cash generative and its strong
liquidity position includes c.GBP500m of immediately available
committed facilities and cash balances, now with an extended
maturity profile. In addition, it is approved to access up to
GBP300m as part of the UK Government's CCFF programme, which
remains unutilised, and has a further c.GBP80m in uncommitted
facilities.
Covid-19 and Current Trading
The safety of our people, their families and wider communities
remains the Group's number one priority and this focus has allowed
us to continue to fully serve our customers through this period.
Our mining markets have remained robust during Q2 with some
disruptions to mining production levels in April and May, although
these appear to be easing through June.
Minerals has continued to show its resilience throughout the
pandemic period. Aftermarket orders in Q2 have been similar to Q1
in absolute terms despite the impact of Covid-19 restrictions.
Year-on-year comparisons will be impacted by a particularly strong
Q2 in 2019 which was an all-time record. Original equipment orders
have also continued at Q1 levels in absolute terms, with a number
of larger gold project orders offsetting general delays across
other commodities. Divisional margins have remained within their
normal 17%-20% range supported by cost mitigation actions.
Demand for ESCO's core mining GET has also been resilient,
although it has seen a greater impact from some customers running
down ore stockpiles and reduced activity in North American iron
ore. The division's infrastructure markets, which represent around
a third of divisional orders, have been more significantly
disrupted as a result of the shutdown in large parts of
construction activity in North America and Europe, which have now
started to recover gradually. Divisional margins have remained
robust supported by delivery of the final acquisition cost
synergies and previously announced cost mitigation actions.
In Oil & Gas, as expected, we have experienced a significant
step-down in North American activity levels in Q2. Cost mitigation
actions have been successfully executed and we continue to expect
the division to be cash generative for the full year. The Group is
continuing to explore options to maximise value from the division
at the right time.
As announced on 26 March 2020, the Group has withdrawn its full
year guidance due to the ongoing uncertainty as a result of
Covid-19. The Board will reinstate guidance when it has sufficient
confidence on the outlook for the rest of the year. We will publish
our interim results, for the six months to 30 June 2020, on 29 July
2020.
About The Weir Group PLC
As one of the world's leading engineering businesses we work in
partnership with our customers to solve their toughest challenges,
making operations smarter, more efficient and sustainable. W e
provide original equipment and aftermarket services to mining,
infrastructure and upstream oil and gas markets, supporting the
essential resources needed by a growing world.
Weir's ordinary shares trade on the London Stock Exchange
(ticker: WEIR LN) and its American Depositary Receipts trade
over-the-counter in the USA (ticker: WEGRY).
Enquiries:
Investors: Stephen Christie +44 (0) 141 637 7111
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+44 (0) 141 637 7111 / +44 (0) 771
Media: Raymond Buchanan 326 1447
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Brunswick: Carole Cable / Charles
Pretzlik +44 (0) 20 7404 5959
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