Marks & Spencer secures Coronavirus funding

Marks & Spencer has secured funding to strengthen its balance sheet during the Coronavirus crisis.

The retailer will borrow cash through the government’s Covid Corporate Financing Facility, and has also reached an agreement with its banking partners to “substantially relax or remove covenant conditions” on an existing £1.1 billion credit facility.

M&S stated that this should secure liquidity for the duration of the pandemic and “underpin the recovery strategy and accelerated transformation” into next year.

Since lockdown measures were introduced last month, M&S’s clothing and home business became “severely constrained”, with warnings that there were likely to be “highly uncertain trading conditions” during a prolonged exit period from the government measures.

Its food business has also been adversely affected by lockdown due to the closure of cafes and falling footfall at some city centre locations.

A statement explained that M&S is now planning for “materially subdued trading” for the remainder of this year, adding that it does not anticipate paying a dividend for the 2020/21 financial year. The company noted that it would generate a cash saving of £210 million.

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