// DFS secures £70m banking facility alongside its existing £250m revolving credit facility
// The retailer completed a placing of about 42.6m new shares, representing 19.9% of issued share capital
DFS has completed a placing of about 42.6 million new shares, representing 19.9 per cent of its issued share capital.
It comes as the furniture retailer secured an additional £70 million banking facility and raised a further £64 million through a share placing.
The new 12-month bank facility of £70 million is in addition to its existing £250 million revolving credit facility maturing in August 2022, which provides immediately available cash resources of £70 million.
- DFS in “advanced stages” of discussions for £60m-£70m funding
- DFS bosses take pay cut, suspends deliveries amid coronavirus pandemic
Directors and members of the DFS senior management team, including the chairman, chief executive and chief financial officer, have participated alongside the placing, contributing £445,000 in aggregate.
DFS said cash operating costs during the coronavirus lockdown are now expected to be less than £14 million per month.
The retailer’s online sales have risen by 24 per cent over the period from March 25 to April 19.
Subsequently, its order book has risen to £194 million as of April 19 from £185 million on March 25.
The retailer said the coronavirus lockdown has had “a very significant impact on business” and the placing and new bank facility, together with cost saving and deferral measures, are expected to make it “significantly more resilient”.
It expects the new funding to provide the company with liquidity headroom amid the pandemic.
It has furloughed 5000 employees, reduced board members’ pay by 20 per cent, rephased supplier payments and secured tax reductions.
“The mitigating actions we have taken in response to Covid-19, alongside the new financing arrangements and placing announced today, significantly increases the financial resilience of DFS for the months ahead,” DFS chief executive Tim Stacey said.
“Alongside these actions, we also greatly appreciate the support and efforts from our loyal employees, committed suppliers and understanding landlords.
“Working together, we have made as much progress as possible to navigate these challenging times.
“While the outlook remains uncertain, DFS is well placed to navigate the coming months and the board remains positive about the long-term prospects of the group.”
The retailer first revealed on Monday that it was in the “advanced stages” of talks over an additional £60 million to £70 million debt facility as it sought to bolster its finances in the face of coronavirus.