Accor has announced today signing a new €560m Revolving Credit Facility (RCF) with five banks. This new injection of liquidity complements an undrawn €1.2bn RCF signed in July 2018.
This new financing reinforces Accor’s liquidity position which today exceeds €4 Billion, enabling it to weather more than 40 months in current market conditions.
The liquidity bank is made up from:
- €2.5bn available cash at-hand as of end-March 2020
- €1.2bn RCF signed in July 2018 – undrawn
- €0.56bn as per the new RCF – undrawn
The new fully committed facility has a 12 months tenor, with two six-months extension options in the hands of Accor and has neither covenant nor restriction.
It has been underwritten by the following 5 banks:
- BNP Paribas
- Crédit Agricole CIB
- Crédit Industriel et Commercial
- Société Générale
The financing reflects trust of Accor’s core banks in its business and balance sheet.
Accor is already implementing the cash preservation plan already announced including:
- The suspension of share buyback programs
- The withdrawal of the dividend in respect of 2019
- The cost-saving measures implemented in end-March
- The reduction of recurring investments
- The suspension of external growth transactions
Operations for Accor, like most in hospitality are still challenging, but the Group has signalled signs of recent business improvement.
Accor points to France, where the relaxation of lockdown coupled with measures announced by the government to support tourism as positive indicators
- RevPAR shows some recovery in China
- The number of opened Accor hotels in the world increases every day, in Asia and in Europe, notably in Germany
- Accor has re-opened 250 hotels since end-April
- Currently 42% of the Accor network is operating
Accor’s extended liquidity is extensive and provides a buffer from short term fluctuations in the global hotel sector. It also seems to signal, they anticipate a long journey out from the impact of Covid-19, and are readying adequately for that.