FirstGroup Secures Covenant Amendments For Next Two Test Dates

(Alliance News) - FirstGroup PLC on Monday said it has secured "enhanced financial flexibility" from its lenders for the next two bank covenant testing dates.

FirstGroup said its September 30 covenant tests are expected to be "comfortably met" when the accounts for the period are finalised. However, while the public transport company is confident that its balance sheet is now "robust in a range of downside scenarios", it has sought covenant amendments "as a matter of prudence".

The bus and train operator said it has agreed covenant amendments for the March 31 and September 30 tests in 2021.

The net debt to earnings before interest, taxes, depreciation and amortisation covenant has been amended to less than 5.5 times and then 4.5 times for the March and September tests, respectively, compared to 3.75 times previously.

At both testing dates the fixed charge covenant has also been amended to greater than 1.0 times, compared to 1.4 times normally. FirstGroup has agreed that net debt including rail ring-fenced cash will not exceed GBP2.0 billion and minimum liquidity levels of GBP150 million will be maintained during this period.

"The group will continue to take all prudent and appropriate action to ensure that it emerges from the pandemic in the most robust position possible in order to best serve our communities and deliver on our strategic plans," FirstGroup said.

Shares in FirstGroup were up 5.9% at 47.88 pence in London on Monday.

By Lucy Heming; lucyheming@alliancenews.com

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