DFS announces proposed share placing to institutional investors

It also revealed new credit-approved inter-conditional committed financing arrangements which “will significantly strengthen the group’s balance sheet and liquidity position during this period of unprecedented uncertainty due to COVID-19.”.

In a statement, DFS said: "DFS has separately announced today a trading update that outlines the significant impact of COVID-19 on the company's operations and its outlook.

"This reflects the closure of its entire store network and the suspension of its delivery operations to comply with social distancing guidelines.

"The group has also announced a number of mitigating actions to protect its financial position, which have reduced its current cash operating costs to under £14 million per month.

"The group also announces today that it has received credit approval for a new 12-month bank facility of £70 million from its existing lending banks, which further strengthens the group's balance sheet beyond the existing bank facilities of £250 million.

"Existing covenants will drop away whilst this incremental facility is in place and for the six months following, but new financial covenants of minimum rolling quarterly EBITDA and cash covenants will apply.

"The group also has undertaken to not pay dividends or conduct any acquisitions until either six months after the repayment of the incremental facility, or following the refinancing of the existing bank facilities. This new facility is subject to documentation on terms and conditions in line with the existing facilities and is conditional on the completion of the placing."

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