Pronovias gets air. The Spanish bridal fashion company, one of the leaders in the segment in which it operates, has signed an agreement with the creditor banks to refinance its debt. The pact is accompanied by an injection of 18 million euros by the BC Partners fund, which was taken over by the company in 2017.
By unanimous agreement of your creditors, according to Standard & Poors, Pronovias has achieved a modification to postpone five quarters (until June 2022) the review of compliance with the covenants of your credit revolving. Pronovias had been renegotiating its debt with the bank for more than six months.
“The covenants Leverage are agreements established by lenders to protect themselves from borrowers who include their obligations; therefore, the unanimous decision of the Pronovias lenders to extend the agreement until June 2022 shows that they trust that the company will not default in this period, ”Pronovias points out.
BC Partners acquired Pronovias in 2017 for 532 million euros, in an operation financed with a loan of 215 million euros, another of 60 million second-lien and a credit revolving of 45 million euros. The credit revolving it includes a covenant (which had to be tested once 40% had been drawn down) that stated that the net leverage ratio should not exceed 9.18 in any quarter. In September 2020, this indicator stood at 12.7.
Pronovias has achieved a modification to postpone five quarters (until June 2022) the review of compliance with the covenants of its revolving credit
Last December, Moody’s downgraded the debt rating of Pronovias again (to Caa2, high risk) due to the lack of cash and having fully disposed of their credit line revolving of 45 million euros. At that time, the rating agency urged an injection of resources by BC Parners.
The liquidity now provided by BC Partners reflects, according to documentation prepared by Standard & Poors accessed by Modaes.es, “the fund’s confidence in the resilience of the business, which is well positioned to grow once the weddings are held again. ”As the restriction measures for Covid-19 are relaxed at the end of the year.
The BC Partners investment will be used to help Pronovias prepare the business for a strong revival when weddings pick up, “especially as performance will likely be boosted in 2021 by the high number of deferrals in 2020.”
BC Partners acquired Pronovias through a loan of 215 million euros, another of 60 million second-lien and a credit revolving of 45 million euros
According to the company, the business has performed better than expected during the pandemic, with fewer orders canceled than the market in general (less than 1%, compared to 5% for the rest of the operators), so that “in the case from Pronovias, there has been a delay in sales rather than a loss ”.
At the end of 2020, the company registered sales records for that time of year: on October 20, 11.5 times more appointments were scheduled for 2021 compared to the number of the same date in 2019.
At the end of 2019, the turnover of Pronovias stood at 160.6 million euros, while its gross operating profit (ebitda) was 43.4 million euros. The company gets the bulk of its business from Europe, which accounts for about 69% of sales. Spain, Italy and the United States are the main markets of the group, with 22%, 21% and 12.5%, respectively, of total sales.
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