Hostelworld Group PLC New term loan and credit financing agreed (8050P)
February 19 2021 - 12:24PM
UK Regulatory
TIDMHSW
RNS Number : 8050P
Hostelworld Group PLC
19 February 2021
LEI:213800OC94PF2D675H41
Hostelworld Group plc
("Hostelworld" or the "Group")
New term loan and credit financing agreed
19 February 2021: Hostelworld, a leading global OTA focused on
the hostel market, is pleased to announce that it has signed a
EUR30 million five-year term loan facility with certain investment
funds and accounts of HPS Investment Partners, LLC or subsidiaries
or affiliates thereof.
The facility will be used for general corporate purposes and
materially strengthens Hostelworld's liquidity position.
Hostelworld will draw down on this facility on 23 February
2021.
Key commercial terms
-- The facility is single drawdown and bears interest at a
margin of 9.0% per annum over EURIBOR (with a EURIBOR floor of
0.25% per annum). Until the first anniversary of drawdown all
interest rolls up and capitalises. Between the first and third
anniversaries of drawdown, Hostelworld has an option to capitalise
up to 4.0% per annum of the accruing interest with the balance of
the interest during that period (and all interest accruing after
the third anniversary of drawdown) being cash pay.
-- The facility agreement includes the following financial
covenants: (1) adjusted net leverage (Hostelworld has to ensure
that total net debt is no more than 3.0 x adjusted EBITDA from 31
December 2023 to 30 September 2024, and no more than 2.5 x adjusted
EBITDA from 31 December 2024 onwards); and (2) minimum liquidity
(Hostelworld has to ensure that at close of business on the last
business day of each month until it is testing the adjusted net
leverage ratios there is free cash in members of the group which
have guaranteed repayment of the facility of at least EUR6.0
million).
-- The lenders have the right to require repayment of the
facility if Hostelworld is subject to a change in control and
Hostelworld has the option to repay the facility early (subject to
the prepayment fees referred to below) .
-- Hostelworld and its principal trading subsidiaries will
guarantee repayment of the facility and amounts payable under it
and provide the lenders with a customary security package over
their assets.
-- Cash dividends to shareholders are permitted provided total
net debt is below 2.0 x adjusted EBITDA , no events of default are
ongoing and the above stated minimum liquidity covenant will be
complied with after taking into account the proposed dividends.
-- The Group is required to fund any new acquisitions through
new equity and/or through a maximum of 50% of retained excess
cashflow. Any acquisition by the Group of the remaining
shareholdings in Goki and Counter is required to be funded from
cash on the balance sheet subject to a cap, new equity and/or a
maximum of 50% of retained excess cashflow.
-- The facility agreement contains representations and
warranties, operational undertakings and events of default which
are reasonably customary for a facility of this type. If an event
of default occurs and is not remedied or waived the lenders have
the right to call for repayment of the facility and any amounts
payable under it and may enforce the guarantees and security
referred to above.
-- If the facility is repaid for any reason within the first
four years of its term a prepayment fee is payable as follows: if
repayment is made (1) in the first two years after drawdown then
all interest from the date of repayment to the second anniversary
of drawdown is due, plus a 2% fee of the amount repaid, (2) between
the second and the third anniversary of drawdown the fee is 2% of
the amount repaid and (3) between the third and fourth anniversary
of drawdown the fee is 1% of the amount repaid.
Warrants
In connection with the facility, Hostelworld has agreed to issue
warrants over 3,315,153 ordinary shares of EUR0.01 each in the
capital of Hostelworld (equivalent to 2 .85% of Hostelworld's
current issued share capital) to the lender (the "Warrants"). The
Warrants may be exercised at any time during the term of the loan
and for a twelve-month period following its scheduled termination
at an exercise price of EUR0.01 per ordinary share . The Warrants
are subject to standard adjustment provisions and anti-dilution
terms including in respect of any future bonus share issues. Where
cash dividends are paid by Hostelworld, the warrantholder is
entitled to receive a cash payment equivalent to the amount it
would have received had the Warrants been exercised at the record
date for the dividend payment.
Additional Information
The Group has withdrawn from the EUR7.0 million RCF facility
previously agreed and announced by the Group on 24 June 2020. The
facility had not been accessed by the Group prior to the date of
withdrawal. In addition, the Group has repaid in full the
short-term EUR3.5 million financing facility announced on 24 June
2020.
Future dividend payments will continue to be subject to the
Company generating adjusted profit after tax, the Company's cash
position, the Company's capital allocation policy together with
certain adjusted leverage and minimum liquidity restrictions
required by the lender.
Marlborough Partners acted as debt adviser to Hostelworld.
MAR information
This announcement contains inside information for the purposes
of Article 7 of the UK version of the Market Abuse Regulation (EU
596/2014) ("MAR") which is part of UK law by virtue of the European
Union (Withdrawal) Act 2018. For the purposes of MAR and Article 2
of Commission Implementing Regulation (EU) 2016/1055, this
announcement is being made on behalf of the Company by Caroline
Sherry, Chief Financial Officer.
For further information please contact:
Hostelworld Group plc
Gary Morrison Chief Executive Tel: +353 (0) 1 498 0700
Officer
Caroline Sherry Chief Financial
Officer
Rudolf O'Kane Head of Commercial
Finance
Powerscourt
Lisa Kavanagh / Eavan Gannon Tel: +44 (0) 20 7250 1446
hostelworld@powerscourt-group.com
About Hostelworld Group
Hostelworld Group, the global hostel-focused online booking
platform, inspires passionate travellers to Meet The World, and
come back with life-changing stories to tell. Our customers are not
your average tourists; they crave cultural connection and unique
experiences that we make possible by providing an unbeatable
selection of hostels in unmissable locations - all in the palm of
their hand.
It is the social nature and community feel of hostels and their
environment that enable travellers to embrace journeys of
discovery, adventure and meaning. We have more than 13 million
reviews across over 17,000 hostels in more than 179 countries,
making our brand the leading online hub for social travel. Our
website operates in 19 different languages and our mobile app in 13
languages.
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