Tabcorp announces a new debt agreement for 2020

Harry Mason

One of the biggest betting operators in Australia, Tabcorp has been challenged by the pandemic, just like many other companies. It has been recently announced that Tabcorp will sanction no dividend in relation to the whole 2020 trading fiscal year. We have to acknowledge that not all of the decisions are made with great delight, but some are made in order to avoid further complications.

In this case, Tabcorp was forced to terminate the 2020 dividend as an important part of the contract, which has been made with the bank lenders. According to the contract, the ASX betting group is allowed to waiver approximately A$2.2 billion of debt until 2021. The fiscal year 2020, had to be finished by the 30th of June. 

Within the updating process for investors, Tabcorp expressed that new terms were required by the company’s ‘coordinated offices understanding’ so as to safeguard working capital aiding Tabcorp specialty units to explore COVID-19 headwinds.

It should be noted that Tabcorp entered negotiations with US private placement holders. Those holders are seeking to obtain new covenant terms on a further A$2.1 billion agreement of the form’s debt. Some of the further action processes depend on the choices and decisions made in regards to the US private placement holders. In case Tabcorp supports further negotiations with the US, the ASX company should not hold any debt maturity repayments for the remaining period of the current 2020 trading year. 

Tabcorp has managed to make some significant improvements even in the pandemic regime. This is indeed a very optimistic and very encouraging move. The company helped improve corporate liquidity to A$820 million, according to the May reports. The change is very drastic while compared to corporate liquidity in the month of April with only A$749 million. 

David Attenborough, the CEO of the Tabcorp Group commented on the ongoing speculations around the company. He said that the whole company welcomes the support of their syndicate banks, especially during the very tiring and challenging times. He also commented on the recent actions and directions they have chosen in order to preserve the liquidity of the company and mitigate the financial and earning impacts of the COVID-19 pandemic.