The operator of 1,700 venues under brands such as Harvester, Toby Carvery, and All Bar One, revealed in a financing update on Friday 12 June that financial support from HSBC UK and Santander UK would provide facilities totalling £250m until 31 December 2021.
M&B clarified this comprises the extension of its existing £150m facilities in addition to £100m in additional finance under the Government-backed CLBILS.
According to the FTSE 250 Group’s statement, M&B is currently using its cash reserves at a rate of between £30m and £35m every four weeks, of which £15m represents underlying losses including rent. The business’ latest cash balance is £130m after drawing down its existing £150m facility.
Having agreed further waivers to terms of its financing arrangements with Ambac Assurance, M&B has also agreed not to pay shareholders a dividend, undertake share buy-backs or repurchase bond debt until the end of the financial year to September 2021.
The group also clarified it expects to reopen sites from early July despite its latest financial arrangements protecting the business in the event of a “conservative downside scenario” in which pub reopenings are delayed until October and previous year trade levels aren’t reached until July 2021.
“We are grateful for the strong working relationships we have with our banking group enabling us to put together this support funding in uncertain times,” Tim Jones, chief financial officer at M&B, said.
“As we come through the challenges posed by the abrupt shutdown of the hospitality sector we now look forward to welcoming back guests into our sites, where safety will clearly be of paramount importance.”
Akhil Shah, relationship director at HSBC UK, added: “The hospitality industry has been particularly hard hit by Covid-19 so providing this support for one of the UK’s largest operators marks an important step in the recovery of the sector.
“As restaurants, pubs and bars prepare to safely reopen, M&B's actions to protect jobs and support the industry’s supply chain provides some much-needed confidence in this crucial part of our economy.”
As previously reported by The Morning Advertiser (MA) on 15 April, M&B announced that 99% of its workforce had been furloughed while basic pay for all employees, including its board, was cut by between 60% and 80% depending on seniority in a bid to cut operating costs.