Fletcher Building update on banking agreements

Fletcher Building Limited, Private Bag 92114, Auckland 1142, 810 Great South Road, Penrose, Auckland 1061, New Zealand


Fletcher Building update on banking agreements
Auckland, 10 June 2020: Fletcher Building has announced amendments to its banking agreements
which will enable the Company to rely on more favourable terms for covenant testing through to the
end of 2021 if required.
CEO Ross Taylor said that given the impact COVID-19 was likely to have on the New Zealand and
Australian markets, the Company was taking pre-emptive steps to reinforce its resilience for the
medium-term.
“The Company has a robust balance sheet position, with c$1.5 billion liquidity and a leverage ratio of
c0.8 times, below the Group’s target range of 1.0-2.0 times. We believe our current balance sheet sets
us up well for the period ahead. That said we are also taking steps beyond this to ensure we will be
well placed to negotiate the uncertain trading environment ahead, these include the reset of our cost
base announced in May, and now the agreements we have reached with our lenders providing
additional headroom on our lending covenants should we need it. We acknowledge the ongoing
support and confidence shown by our Syndicate and USPP partners in reaching these agreements.”
Under the agreements, the Company may elect to rely on more favourable levels for its Total Interest
Cover and Senior Interest Cover covenants for the period from June 2020 to December 2021 (inclusive)
if required. These levels are a Total Interest Cover ratio of 1.5 times (normally 2.0 times) and a Senior
Interest Cover ratio of 2.25 times (normally 3.0 times), with EBIT in 4Q20 for the purposes of testing
these interest cover ratios set at $231 million. The 4Q20 EBIT adjustment reflects the Group’s pre-
COVID forecast for the final quarter of FY20, with the actual result materially impacted by the
government measures to control the virus in New Zealand and Australia.
Mr. Taylor confirmed that the Company expects to be in compliance with its normal covenant levels at
June 2020.
The Company has agreed that, should it need to rely on the more favourable covenant levels, it will not
pay a dividend until it returns to compliance with, and agrees to be tested by, its normal covenant
levels.
In considering its decision on the FY20 dividend in August, the Board will have regard to the impact of
COVID-19, the trading environment and outlook, as well as the terms of these amendment agreements.
#Ends
Authorised by:
Andrew Clarke
Company Secretary
For further information please contact:
MEDIA
Christian May
General Manager – Corporate Affairs
+64 21 305 398
Christian.May@fbu.com
INVESTORS AND ANALYSTS
Aleida White
Head of Investor Relations
+64 21 155 8837
Aleida.White@fbu.com