ISSY-LES-MOULINEAUX, France — Following recent discussions with USPP debt holders, Sodexo has decided to exercise its right to reimburse its USD 1.6bn outstanding debt to ensure independence of action. The different USPP notes had been put in place between 2011 and 2018 to finance acquisitions in the US.
With liquidity1 of nearly 5 billion euro at the end of May, including the recent 1.5 billion euro bond issue in April, the Group has the resources to finance the reimbursement and maintain a strong financial structure.
The Group intends to proceed with this reimbursement before year end closing. As per the conditions of the USPP debt agreements, the reimbursement includes a make-whole2 of approximately €149m. By anticipating the reimbursement of this debt, future financial costs will be reduced by €198m, of which €52m in 2021. The average cost of debt going forward will fall to approximately 1.2%, versus 2.3% at the end of the 1st half Fiscal 2020.
As a result of this operation, Sodexo will have no covenants and will retain full agility to navigate in these uncertain times.
Sodexo will continue to have an active policy of debt-financing going forward.
1 Liquidity as of May 31, 2020 includes Cash (including restricted cash) and unused credit facilities recently raised to 2 billion euro after the signing of additional bilateral on May 20, 2020.
2 Net present value of flows – nominal value.
