PARIS, 20 May 2020: Hard hit by Covid-19, Accor announced Tuesday that it has signed an agreement with a consortium of five banks for a new EUR560 million revolving credit facility (RCF).
Europe’s biggest hotels group, with brands such as Sofitel and Ibis, Accor said the new credit facility had been underwritten by BNP Paribas (BNPP.PA), Credit Agricole CIB (CAGR.PA), Credit Industriel et Commercial (CIC), Natixis (CNAT.PA) and Societe Generale (SOGN.PA).
Accor in a media statement acknowledged operations were still challenging, but the group sees initial signs of business improvement.
In France, the lockdown relaxation and the measures announced by the government to support tourism in the country are favourable elements.
RevPAR shows some recovery in China while the number of opened hotels in the world continues in Asia and in Europe, notably in Germany. Accor has re-opened 250 hotels since the end-April. To date, 42% of the Accor network is now operating again. Accor warned last month of likely losses for April and May.
The latest revolving credit facility strengthens the group’s liquidity and complements the undrawn EUR1.2b billion RCF signed in July 2018. It further reinforces Accor’s liquidity position, which today exceeds EUR4 billion; enough to cover for up to 40 months under current market conditions.
At the end of March, the hotel company had available cash of EUR2.5 billion; EUR1.2 billion in RCF signed in July 2018 still undrawn and EUR560 million as per the new RCF also undrawn.
The new fully committed facility has a 12 months tenor, with two six-month extension options in the hands of Accor and has neither covenant nor restriction.
Accor is implementing the cash preservation plan announced earlier, that included the suspension of the share buyback programme. It involves:
Withdrawal of the dividend in respect of 2019;
cost-saving measures implemented in end-March;
reduction of recurring investments;
suspension of external growth transactions.