Samsonite International S.A., the world's best-known and largest lifestyle bag and travel luggage company, announced it has completed the syndication and allocation of a new term loan borrowing and amended its credit agreement to provide financial covenant relief. These actions will enhance Samsonite's strong liquidity position and increase its financial flexibility as the Company addresses the ongoing impact of the COVID-19 pandemic.
On April 30, 2020, Samsonite completed syndication and allocation of a senior secured incremental term loan B facility (the "2020 Incremental Term Loan B Facility") in the aggregate principal amount of US$600.0 million(1). Closing on the 2020 Incremental Term Loan B Facility is expected to occur on May 7, 2020 and is subject to customary closing conditions.
Additionally, on April 29, 2020, Samsonite entered into an amendment to its credit agreement which suspends the requirement to comply with its net leverage and interest coverage covenants until the third quarter of 2021 and provides more flexibility in the calculation of such covenants beginning with the third quarter of 2021 and until the second quarter of 2022(2).
As previously announced, on March 16, 2020, the Company and certain of its direct and indirect wholly-owned subsidiaries entered into an amendment to its credit agreement, which provided for an amended US$800.0 million senior secured term loan A facility and an amended revolving credit facility that was increased by $200 million to US$850.0 million.
The Company expects to have available liquidity of approximately US$1.8 billion upon the closing of the 2020 Incremental Term Loan B Facility. Samsonite has taken significant cost-saving measures and will continue to actively pursue additional cost-saving measures going forward. The Company has also pulled many levers to conserve cash.
Kyle Gendreau, Samsonite's Chief Executive Officer, said: "While Samsonite addresses the ongoing impact of the COVID-19 pandemic, the health and safety of our employees and their families, as well as our customers and business partners, has been and will continue to be our top priority. Samsonite also is focused on maintaining a strong balance sheet, liquidity position and financial flexibility. We appreciate the deep relationships and support we have with our lenders who provided additional liquidity through the US$200 million increase in the revolving credit facility and covenant relief until the third quarter of 2021 to enhance our financial flexibility."
Mr. Gendreau continued, "We are further encouraged by the strong institutional demand for our new Term Loan B financing, which enabled us to upsize our new term loan B facility by US$100 million to US$600 million, underscoring the investment community's confidence our business. We believe our liquidity position of approximately US$1.8 billion once we close this financing, along with the aggressive cost reduction initiatives as well as other actions to preserve cash that we have implemented to date and will continue to pursue, will provide us sufficient capacity to navigate the current trading conditions as well as a prolonged downturn."
Mr. Gendreau concluded, "We are confident in the strength of our brands, our global scale and reach, as well as the ability of our amazing teams around the world. These qualities have helped Samsonite successfully manage through past travel disruptions, and they will enable the Company to navigate through the current challenges and to capitalize on future growth opportunities."