// Marks & Spencer secures government funding amid the Covid-19 chaos
// It said the funding will “secure liquidity” for the duration of the coronavirus pandemic
Marks & Spencer has secured fresh funding in a bid to strengthen its balance sheet during the coronavirus pandemic.
The retailer is looking to borrow cash through the government’s Covid Corporate Financing Facility, and has reached an agreement with its banks to “substantially relax or remove covenant conditions” on its existing £1.1 billion credit facility.
M&S said this would “secure liquidity” for the duration of the pandemic and “underpin the recovery strategy and accelerated transformation” during 2021.
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Since the UK went into lockdown last month, M&S’s clothing and home business became “severely constrained” and it warned that there were likely to be “highly uncertain trading conditions” during a “prolonged exit period” from those government measures.
The retailer said it was now planning for “materially subdued trading” for the remainder of 2020.
Meanwhile, in its food business, M&S had been “adversely affected by lockdown due to the closure of cafes” and a slump in footfall at some city centre locations.
As a result, M&S said it “does not at this stage anticipate” paying a dividend for the 2020/21 financial year.
It said that would generate a cash saving of £210 million.
Moreover, the retailer said it will publish its full-year results for 2019/20 on May 20.