Tabcorp dumps dividend to secure debt waiver
Wagering giant Tabcorp will not pay a dividend this year as part of an agreement with lenders to waive debt covenants until the end of 2020.
The group, which has been hit hard by the pandemic as it forced race tracks to shut to the public and the suspension of major sporting leagues, said on Tuesday morning that lenders representing $2.2 billion of loan facilities had agreed to waive leverage and interest cover covenants on testing dates due on June 30 and December 31.
Tabcorp CEO David Attenborough. The wagering company is working to obtain waivers on more of its loans. Credit:Wayne Taylor
"As part of securing the waivers… the Tabcorp board has resolved not to pay a final dividend in relation to FY20," the company said in a statement.
"Tabcorp is also in advanced discussions with its US Private Placement holders (which represent fully hedged debt equivalent to $2.1 billion) to obtain changes to existing covenants to provide additional flexibility to accommodate the impacts of COVID-19."
The company said it had $820 million in available liquidity. It has a $171 million loan due in December and a working capital facility of $225 million due in July 2021, and no other debt maturities until April 2022.
"The waivers complement recent actions we have taken to preserve our liquidity and mitigate the financial and earnings impacts of COVID-19," Tabcorp CEO David Attenborough said.
"Tabcorp continues to work proactively and collaboratively with all our stakeholders to emerge from the COVID-19 period as strongly as possible."
Tabcorp's shares have fallen 31 per cent since February 14, from $4.65 to $3.17. The stock has however recovered from COVID-19 lows of $2.18 in late March.
More to come