Tabcorp (ASX:TAH) - CEO, David Attenborough
CEO, David Attenborough
Source: Sydney Morning Herald
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  • In the wake of further COVID-19 economic impacts, Tabcorp Holdings (TAH) has been granted debt covenant waivers and opted not to pay a 2020 dividend
  • Australia’s largest gambling company secured an agreement from its bank leaders under its syndicated facility agreement for a waiver of leverage and interest covenants on approximately $2.2 billion in debt until 2021
  • This waiver covers the next two testing dates for the debt, set to occur on June 30 and December 31
  • The Tabcorp board said the decision not to pay a final dividend for the 2020 financial year came after securing the waivers
  • Tabcorp has also increased its available cash since last month, bringing its available liquidity up by $71 million to $820 million
  • Tabcorp Holdings is up 2.52 per cent on the market this morning, trading for $3.25 per share

In the wake of further COVID-19 economic impacts, Tabcorp Holdings (TAH) has been granted debt covenant waivers and opted not to pay a 2020 dividend.

Covenant waivers granted, dividend slashed

Australia’s largest gambling company secured an agreement from its bank leaders under its syndicated facility agreement (SFA) for a waiver of leverage and interest covenants on approximately $2.2 billion in debt until 2021.

A covenant is a promise in an agreement, or any other formal debt agreement, that certain activities will or will not be carried out or that certain thresholds will be met.

This waiver covers the next two testing dates for the debt, set to occur on June 30 and December 31. The Tabcorp board said the decision not to pay a final dividend for the 2020 financial year came after securing the waivers.

Tabcorp is also in discussions with its U.S. Private Placement holders, which represent roughly $2.1 billion in fully-hedged debt, to obtain changes to existing covenants and provide additional flexibility to help cover the costs of COVID-19.

Liquidity

Tabcorp also took the time to update shareholders on its liquidity today.

As of May 15, Tabcorp had $820 million in available liquidity, compared to the $749 million available on April 3.

Other than the U.S. private placement of $171.5 million, which matures in December 2020, and a working capital of $225.8 million, which will need to be paid by July 2021, there are no debt maturities until April 2022.

CEO David Attenborough said he welcomes the support from the syndicate banks during this challenging period.

“The waivers complement recent actions we have taken to preserve our liquidity and mitigate the financial and earnings impacts of COVID-19,” he said.

“Tabcorp continues to work proactively and collaboratively with all our stakeholders to emerge from the COVID-19 period as strongly as possible,” he added.

Tabcorp Holdings is up 2.52 per cent on the market this morning, trading for $3.25 per share at 11:04 am AEST.

TAH by the numbers
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