A £350 million refinancing deal for self storage retailer Safestore has been agreed in Birmingham.
Safestore has entered into a new increased bank facilities agreement to August 2013 to replace its existing facilities for the United Kingdom and for France which were due to expire in July 2011.
These new facilities – agreed by HSBC Corporate Banking in the Midlands alongside Royal Bank of Scotland, will allow the company to continue with its stated growth plans of acquiring purpose built stores in high priority locations and replacing older first generation stores with modern self storage centres in prime trading locations.
The principal terms of the refinanced bank agreement include increased group facility of £350 million and €40 million to replace the previous facilities of £302 million and €60 million, with Royal Bank of Scotland and HSBC Bank acting as coordinating mandated lead arrangers.
Ian Sharp, HSBC senior global relationship manager, Midlands, said: “Our teams both in the Midlands and France are delighted to support our long term customer with a package which will provide a sound footing to support both domestic and international growth.
“We believe that the strength of the brand, along with the superior quality of its service and business model will help to ensure its continued success in the long term.”
The banking syndicate comprises seven members – Royal Bank of Scotland, HSBC, Bank of Ireland, Nationwide Building Society, Lloyds Banking Group, Santander and BRED Banque Populaire.
The new facilities, which include a principal repayment of £5 million due after two years and six-monthly repayments thereafter of £7.5 million, will provide £69 million headroom for investment.
Safestore chief executive Steve Williams said: “It is pleasing that the new increased facilities have been secured from a combination of banks with whom we have enjoyed a long term banking relationship and new lenders. We are delighted with the continuing confidence, commitment and support from our existing lenders and we welcome Lloyds Banking Group, Santander and BRED Banque Populaire to the syndicate.
“These substantially increased facilities, alongside our strong cash generation, will be available to assist with the funding of the Group’s growth. In particular, the funds will help new store acquisitions and the replacement of older generation stores in prime trading areas over the coming years and will provide the Group with additional flexibility and a sound financial structure for the medium term. Safestore, with its strong cash flow characteristics, operating expertise and market leading position, continues to be ideally placed for further progress.”