H&M signs new £859m credit facility to strengthen liquidity amid Covid-19

Swedish clothing retailer H&M has revealed it has signed a new €980m (£859m) revolving credit facility as it looks to strengthen its liquidity amid the coronavirus outbreak.

H&M said it is a 12 month deal with a six months extension option and is in addition to the company’s undrawn €700m (£614m) RCF signed in 2017 and maturing in 2024.

The retailer added that the group’s liquidity “remains good” and it is continuing its work to set up a combination of different financing solutions.

The facility was supported by a group of H&M Group’s relationship banks. SEB acted as co-ordinator, joined by BNP Paribas, Danske Bank, Standard Chartered Bank and Commerzbank.

Last month, the group reported a rise in sales in its first-quarter results, despite being “negatively impacted” by the outbreak of Covid-19.

For the period ended 1 December 2019, H&M reported an 8% increase in net sales to SEK 54,988m (£46,609m), compared with £51m in the year prior.

At the time it said: The H&M group is working extensively to manage the Covid-19 situation, the highest priority being the safety of employees and customers.

“While the H&M group’s transformation work continues at full speed, all activities in the company are now being carefully evaluated – including from a cost and risk perspective – so as to be able to mitigate the negative effects associated with the virus as far as possible.”