Beleaguered Dutch retail giant Ahold has announced that it has entered into a revolving credit facility with ABN AMRO, Goldman Sachs, ING, JP Morgan and Rabobank.
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The facility provides for aggregate borrowings of €2.65bn (US$2.90bn). In addition, the company said banks remain committed to provide an additional €450m backup facility to support existing US$850m securitisation programmes. Ahold had previously announced on 24 February the €3.1bn commitment of the financial institutions and banks to provide the new credit facility as well as the backup facility.
Henny de Ruiter, chairman of Ahold’s supervisory board, commented “Entering into this new credit facility is an important step in stabilising Ahold’s financial condition and demonstrates our continued access to significant liquidity. While no one can predict the future, we are encouraged by the lenders’ conclusion to move forward and we remain optimistic about the company’s prospects. With this new credit facility in place, the company can now turn its attention to the development of longer term solutions to the problems that have arisen from Ahold’s recently disclosed accounting issues.”
The credit facility, which has a term of 364 days from 24 February 2003, provides for two tranches of borrowings. Under one tranche, a total of US$1.29bn and €600m is available immediately. The second tranche of $915m will be available following the satisfaction of various conditions, including the delivery to the lenders of audited fiscal year 2002 financial statements of Stop & Shop Supermarkets Company and Albert Heijn by 31 May 2003 and of audited fiscal year 2002 consolidated financial statements of Ahold by 30 June 2003, which currently also must be delivered for the first tranche to remain available. Amounts owing under the facility are guaranteed by Ahold and certain of its other subsidiaries. In addition, the borrowings under the first tranche are secured by a pledge of the shares of stock of Ahold’s significant Dutch and American retail subsidiaries.
Ahold anticipates that the new facility will be used to repay certain outstanding indebtedness and for general working capital purposes.
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