Australian gambling operator Tabcorp has announced it will not pay a dividend in relation to its 2020 financial year as part of its response to mitigate the impact of the novel coronavirus (Covid-19) pandemic on the business.
The decision comes as Tabcorp secured an agreement from its bank lenders under its Syndicated Facility Agreement (SFA), which represents facilities of A$2.2bn (£1.18bn/€1.32bn/US$1.44bn) for a waiver of leverage and interest cover covenants.
As a condition of the arrangement, Tabcorp has agreed to not to pay a final dividend for its fiscal year ended 30 June, 2020.
Meanwhile, Tabcorp said it is in advanced talks with its US private placement holders to obtain changes to existing covenants to provide additional flexibility and help accommodate the impact of coronavirus. The value of the US placement holders amounts to a fully hedged debt equivalent to A$2.1bn.
“We welcome the support of our syndicate banks during this challenging period,” Tabcorp’s managing director and chef executive David Attenborough said. “The waivers complement recent actions we have taken to preserve our liquidity and mitigate the financial and earnings impacts of Covid-19.”
As of 15 May, Tabcorp had A$820m of available liquidity in undrawn facilities and unrestricted cash, compared to A$749m of available liquidity at 3 April, when it issued its previous update in relation to coronavirus.
At the time, Tabcorp announced a number of measures to lessen the impact of coronavirus, including furloughing more than 700 of its staff until 30 June.
Full-time staff were also told to take at least one day of leave per week between 6 April and 30 June, while there was an initial cut of around 40% in the number of technology contractors employed by the business.
In addition, Attenborough took a a 20% reduction in his fixed remuneration until 30 June, while all board chairman and non-executive director fees have been reduced by 10% until the end of June.
“Tabcorp continues to work proactively and collaboratively with all our stakeholders to emerge from the Covid-19 period as strongly as possible,” Attenborough said.