Redrow secures funding to ease Covid-19 impact
The Flintshire-based housebuilder said it would receive £100m of additional debt funding to help it weather the effects of the pandemic and also delay the retirement of its executive chairman, John Tutte.
Redrow has concluded negotiations with its six relationship banks following a request for financing under its existing revolving credit facility, the company said in a statement to the London Stock Exchange, where its shares are traded, on Monday.
In a statement on 9 April, Redrow said it had been confirmed as an eligible issue for the Government-backed loan scheme, the Covid Corporate Financing Facility, with a £300m limit.
With the agreed £100m of funding, the housebuilder, which is headquartered near Chester, has £350m of committed debt facilities, which matures at the end of December 2022, it said today.
In its statement earlier this month, Redrow said around 80% of its workforce have been furloughed to further protect the business, while the board and directorate have each volunteered to take a 20% salary cut “for the duration of the crisis”.
Further measures are being implemented to “proactively protect our cash flow”, the statement said.
Today, Redrow said Tutte, who plans to retire from the board by 2021, will delay his step back to non-executive chairman until November, from an initial date of 30 June.
“John will support the senior management team to ensure an orderly return to operations when the business is satisfied it is safe to do so,” the statement said. Chief operating officer Matthew Pratt is to become group chief executive from 1 July.
Tutte said: “The positive progress we have made on securing additional banking facilities means we can now finalise plans for our valued workforce and supply chain, to make an orderly return to work when we are advised it is safe to do so.”
Redrow’s share price was down more than 3% on Monday morning to 393p.
Last month, Redrow was granted planning consent for its next phase of 227 homes at Ledsham Garden Village in Cheshire, and it is also working on plans for 200 homes near Preston, among other regional schemes.