New Banking Facilities
15/03/2022 07:01
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RNS Number : 7529E Rotala PLC 15 March 2022
RNS
15 March 2022
Rotala Plc
("Rotala", the "Company" or the "Group")
New Banking Facilities
The Company is pleased to announce that it has signed a new banking facilities
agreement with its principal bankers, HSBC Bank plc. These facilities comprise
a Revolving Commercial Facility ("RCF") of up to £17 million and a Mortgage
Facility of £5.8 million. The RCF has an initial term of three years,
expiring on 14 March 2025, with the option to extend it for up to a further
two years. It is currently completely undrawn. The Mortgage Facility commenced
in 2017 and was originally for £8.0 million. Since that time, repayments have
reduced the amount outstanding to £5.8 million. It remains on a term of up to
twenty years expiring in December 2037. In addition, the Company has an
overdraft facility of up to £3 million with the same bank. This is ample for
the Company's needs and is renewed annually.
The Department for Transport ("DfT") has recently announced the extension of
its Bus Recovery Grant ("BRG") scheme, which was originally due to expire in
early April 2022, with a further £150 million package under the same scheme
covering the period up to October 2022. The Company welcomes this additional
funding which reflects the gradual return of the bus industry to normal
operating conditions. Rotala's passenger volumes continue to increase steadily
and are currently at approximately 80% of their pre-COVID-19 levels. The Board
expects passenger volumes will continue to recover and that the new BRG
package will aid that recovery.
The DfT is expected soon to announce awards under its Bus Service Improvement
Plan scheme, which is part of its National Bus Strategy. The National Bus
Strategy envisages that the Government will invest an additional £3 billion
in the next few years with the aim of reforming and revitalising bus usage in
England. At the same time, the Board believes that, as the bus industry
emerges from the protection offered by BRG and its predecessor schemes, and
commercial reality returns, opportunities for organic growth and acquisitions
are likely to arise once more. Stagecoach Group plc, one of the largest UK
bus operators, has attracted competitive bid interest. The Board believes that
this transaction could be a precursor of others in the bus industry, at both
large and small levels, in the short to medium term.
The Board took the decision to refresh its banking facilities at this time to
equip the Company with the resources necessary to take advantage of any
suitable opportunities that might arise out of these industry developments.
Since the Revolving Commercial Facility is currently undrawn, the Board
believes that the Company possesses ample unused facilities to further its
ambitions, should the opportunity arise.
Rotala Plc 0121 322 2222
John Gunn, Chairman
Simon Dunn, Chief Executive
Kim Taylor, Group Finance Director
Shore Capital 020 7408 4090
Tom Griffiths / James Thomas / Michael McGloin (Corporate Advisory)
Henry Willcocks (Corporate Broking)
About the business
Rotala provides a range of transport solutions, ranging from local bus
services under contract to local authorities, through to commercial bus
routes. Rotala has operations at Heathrow Airport, in the West Midlands and in
the North West. Operating companies are Diamond Bus Ltd, Diamond Bus (North
West) Ltd, Hallmark Connections Ltd and Preston Bus Ltd.
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