Harworth Group plc has agreed a new senior debt package comprising a five-year £200 million revolving credit facility (“RCF”) together with a £40 million uncommitted accordion option, provided by Natwest, Santander and HSBC.
The facility replaces Harworth’s previous RCF with Natwest and Santander, which was increased from £130 million to £150 million in 2021, and had an expiry date of February 2024.
The new RCF is aligned to Harworth’s strategy to double the size of its business over the next five to seven years and provides significant additional liquidity and flexibility. The interest rate of the facility is on a ratchet mechanism with a margin payable above SONIA in the range of 2.25% to 2.50%.
Harworth’s financing strategy remains to be prudently geared. Its Income Generation portfolio provides a recurring income source to service debt facilities and this is supplemented by proceeds from an established sales track record that has been built up since re-listing in 2015.
To deliver its strategic plan, Harworth has adopted a target net loan to portfolio value at year end of below 20%, with a maximum year end net loan to portfolio value of 25%. The Group will continue to use site-specific development and infrastructure loans alongside the main banking facilities to support the revised strategy.
Harworth was advised on the new debt facility by Centrus Advisors and Eversheds Sutherland.
Lynda Shillaw, Chief Executive, Harworth Group plc, says:“Harworth’s strong balance sheet and prudent gearing is one of the key enablers of our ambitious growth strategy. This new debt package, which adds another established institutional lender to our banking group, will provide Harworth with additional firepower and flexibility as we step into this strategy and deliver our Purpose of creating places where people want to live and work. I would like to thank Natwest and Santander for their continued support, and to welcome HSBC.”