Imperial Brands and British American Tobacco sign deals for new credit
Imperial Brands and British American Tobacco (BAT) have announced deals for new credit but say the pandemic has had little material effect on business.
Imperial Brands announced a €3.5bn (£3.13bn) multi-currency revolving credit facility (RCF). The credit line has an initial three-year term that could be extended bi-annually.
BAT separately said it had priced an offering of $2.4bn (£1.95bn) notes and intends to use the proceeds for general business purposes, including paying off upcoming maturities.
The cigarette maker said the impact of the coronavirus outbreak on BAT’s business has not been material but if the situation deteriorates or persists for an extended period in key geographies “the risk of a significant adverse impact to the BAT Group’s business will increase.”
It said the impact of the pandemic depended on a range of factors including reductions or voltaility in consumer demand due to retail closures, travel restrictions or economic hardship. Additionally, significant volatility in financial markets – including exchange rate volatility – and measures adopted by governments and central banks that further restrict liquidity could limit BAT’s access to funds.
Similarly, Imperial Brands said although the economic and social impact of the coronavirus pandemic is developing rapidly, “there has been no material impact on group performance to date” and current trading remains in line with expectations.
The cigarette brand added: “Our distribution business, Logista, which serves Italy, France and Spain has increased the levels of finished goods stock in its regional distribution hubs and continues to deliver product to retailers.”
Last month, Imperial warned that its first half earnings per share and full-year profit would fall amid a global crackdown on e-cigarettes. The British firm said “regulatory uncertainty” and negative news stories about vaping would dent profit by around £40m.
Shares in Imperial Brands are up 8.84 per cent, while BAT is up 0.95 per cent.