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FACC strengthens financial position ahead of cost reductions

COVID-19-related challenges have spurred further implementation of FACC’s 2019 cost reduction program, which is expected to generate total annual savings of up to €50 million. 

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FACC

Source | FACC

Against the challenges posed by the COVID-19 pandemic, aviation and aerospace company FACC AG (Ried im Innkreis, Austria) reported on July 1 that it is strengthening its financing structure and liquidity to prepare itself for further implementation of a cost reduction program started in 2019.

As planned, FACC redeemed the corporate bond issued in 2013 for €90 million on June 24, 2020. In addition to existing syndicated credit lines, FACC says the basis for this was a promissory note loan for €70 million issued in July 2019. While the bond was repaid, negotiations were concluded on a new additional financing line with a volume of €60 million as part of the COVID-19 assistance of the Austrian Kontrollbank (OeKB).

"Despite the expected revenue and earnings losses due to the pandemic in the current year — and probably in the upcoming year — we can thus secure the necessary liquidity for the continuation of our cost-reduction program. The program, which is expected to generate total annual savings of up to €50 million, is already beginning to take effect in some areas,” comments FACC chief financial officer Aleš Stárek.

To prepare itself for the effects of the pandemic on the aviation and aerospace industry, FACC recently defined an additional "corona savings program" of €15 million, which is also already being implemented. In addition, FACC says it is planning talks with core banks in the fall about a temporary adjustment of the current syndicated financing.

Aleš Stárek continues, "With all these measures to strengthen our liquidity, we are also improving our starting position to overcome the crisis. A further positive factor in this regard is our solid equity ratio, which we would like to maintain by waiving the dividend payment for the 2019 financial year.”

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