ITALY. Gearing up for growth. That’s the clear message from travel retail to food & beverage powerhouse Autogrill Group, which today signalled its ambitions in both sectors by announcing the refinancing of a sizeable portion of its consolidated debt. This has been achieved through two new credit facilities worth €1.35 billion.
Autogrill owns two of the world’s leading travel retailers (now integrated) in Aldeasa and WDF (which collectively embrace the former Alpha Airports Group’s travel retail interests) and food & beverage giant HMSHost.
Both new credit facilities have final maturity in July 2016 and will be utilised for the early repayment of two loans expiring in 2012 and 2013, “and to ensure that resources are available for development”.
In the first agreement, Autogrill S.p.A, Autogrill Group Inc. and Host International Inc have signed a new credit facility worth €700 million.
The new financing is split into two revolving credit facilities amounting to €124 million (first tranche) and €576 million (second tranche), both expiring in July 2016, to cover food & beverage financing requirements. The second tranche is multicurrency and multiborrower.
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HMSHost’s new Park Café at Amsterdam Airport Schiphol typifies the company’s global aspirations |
At the same time, Autogrill España SAU, holding company for the Autogrill Group operations in the travel retail & duty free sector and its subsidiaries Aldeasa S.A., World Duty Free Europe Limited and Autogrill Retail UK Limited, has signed a new multicurrency and multiborrower credit facility worth €650 million.
The new financing, which will provide the travel retail & duty free sector with direct access to credit markets, is split into two revolving credit facilities amounting respectively to €400 million (first tranche) and €250 million (second tranche), both expiring in July 2016, to cover financing requirements in the sector.
The margin applied is variable based on the sub-consolidated financial leverage reported by Autogrill’s Travel Retail & Duty Free Group.
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Aldeasa will now be able to continue heavy investment in stores such as this new outlet at Palma de Mallorca Airport |
The two new credit facilities allow the Group to repay and cancel the financing arranged for the Aldeasa S.A. and World Duty Free Europe Limited acquisitions (final maturity March 2013, original amount €1 billion), the 2005 revolving credit facility (amounting to €300 million) and a portion of a bilateral facility (both expiring in June 2012), well in advance of the original maturities.
As a result of the significant reduction in borrowing – made possible by what it described as strong cash flow generation – the Group said that it does not expect to draw down the two credit facilities entirely, “leaving committed medium long-term credit lines available for future utilisation to support growth opportunities and seasonal business trends”.
[Another example of group investment; this time World Duty Free’s new walk-through store at Birmingham Airport]
COMMENT: This is a statement of intent. In a telling conclusion that spells out Autogrill’s aspirations, the company said: “The new financing, allowing margins of flexibility and financial covenants in line with those of the cancelled credit lines, ensures adequate financial support for the Group, thus allowing it to pursue growth strategies in both business areas.”
The group has undoubtedly been restricted by its debt constraints in recent times, which has resulted in a relatively conservative approach and most focus placed on the bedding-in of the WDF and Alpha acquisitions.
Today’s news seems to augur a more aggressive approach, possibly bringing further acquisitions into play, as well as the ability to compete aggressively in forthcoming major airport tenders, plus continued heavy investment in existing operations.
BACKGROUND:
The €700 million Autogrill S.p.A, Autogrill Group Inc. and Host International credit facility was arranged by Commerzbank, ING Bank, Intesa Sanpaolo/Banca IMI, Mediobanca, Natixis, Rabobank, UniCredit Corporate & Investment Banking (acting as Mandated Lead Arrangers and Bookrunners), Centrobanca Gruppo UBI Banca (acting as Mandated Lead Arranger) and Banca Popolare di Milano (acting as Arranger). Mediobanca acted as Global Coordinator and Banca IMI is the Facility Agent.
The €650 million facillity was arranged and committed by Barclays Bank, Banco Santander, BBVA, BNP Paribas, Citi, Crédit Agricole Corporate and Investment Bank, Intesa Sanpaolo/Banca IMI, Mediobanca, Natixis, UniCredit Corporate & Investment Banking (acting as Mandated Lead Arrangers and Bookrunners), The Royal Bank of Scotland (acting as Mandated Lead Arranger), La Caixa (acting as Arranger). BNP Paribas acted as Global Coordinator and Banca IMI is the Facility Agent.
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