Royal Mail Restructuring Loan Facility
The Royal Mail Group, a wholly owned subsidiary of Royal Mail Holding plc, is currently implementing a major restructuring plan which is responsible for it incurring exceptional costs over this period. In respect of this the DTI agreed a £1.044 billion financing package for Royal Mail to support it through this restructuring exercise.
The loan facility is based on quasi-commercial terms and the lending is secured against assets of the business. The agreement has also been subject to and received European state aid clearance. The various loan facilities that the package comprises have been available for utilisation since December 2002 and the available funds were split into two main classes.
Loan Facilities of up to £544 million
comprising:
1) two separate one-off loans of £100 million each;
2) a £344 million revolving loan.
Option 1 (either loan) has not yet been utilised. If utilised the maturity date for these one-off loans would be the 20th March 2007. Option 2 has also not yet been utilised and the available funds reduce to £194 million from the 20th March 2008. The final maturity date for the revolving loan facility is the 20th March 2009.
Bonds of up to £500m comprising:
1) the option for the DTI to purchase a bond of £300
million from the company;
2) the option for the DTI to purchase a bond of £200
million from the company;
Option 1 has not yet been utilised by the company an its availability currently runs until the 20th July 2006. If the bond is utilised it will mature on the 20th March 2009. The availability period for option 2 (regarding the purchase of a £200m bond) has now lapsed.