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Hostelworld Group PLC- Ireland-based online booking platform - Signs EUR30 million five-year term loan facility which will be used for general corporate purposes and will materially strengthen its liquidity position. Hostelworld will drawn down on the facility on Tuesday next week. The loan is with "certain investment funds and accounts of HPS Investment Partners, LLC or subsidiaries or affiliates thereof."
The loan is single drawdown and bears interest at 9.0% per annum over EURIBOR with a EURIBOR floor of 0.25% a year. All interest rolls up and capitalises until the first anniversary of drawdown. Hostelworld will, between the first and third anniversaries, also have the option to capitalise up to 4.0% per annum of accruing interest with the balance of the interest during that period.
Financial covenants for the loan include adjusted net leverage, with Hostelworld needing to ensure net debt is no more than 3.0 times adjusted earnings before interest, tax, depreciation, and amortisation from December 2023 to September 2024 and no more than 2.5 times adjusted Ebitda from the end of 2024 onwards. There is also a minimum liquidity requirement under which Hostelworld must have at least EUR6.0 million of free cash on the last day of each month until it is testing the adjusted net leverage ratios.
Cash dividends are permitted so long as total net debt is less than 2.0 times adjusted Ebitda, there are no ongoing events of default, and the minimum liquidity convents is met taking dividends into account. Should the facility be repaid within the first four years, a prepayment fee is payable.
Hostelworld has agreed to issue 3.3 million of warrants in connection with the loan, which may be exercised at any point during the term loan and for 12 months after its scheduled termination at a EUR0.01 exercise price.
Hoestelworld noted it has withdrawn from a EUR7.0 million revolving credit facility previously agreed and announced June 2020, which has not been accessed before the withdrawal date and has repaid in full a EUR3.5 million short-term facility also announced at that time.
Current stock price: 78.00 pence
Year-to-date change: down 0.6%
By Anna Farley; annafarley@alliancenews.com
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