Redrow closes all sites, in talks with banks about more credit
By Michele Maatouk
Date: Friday 27 Mar 2020
(Sharecast News) - Redrow said on Friday that it was closing all of its sites and offices due to the coronavirus and is in talks with banks about securing more credit.
In response to government guidelines about social distancing, the housebuilder initially reduced the workforce on its sites. However, it said this had become increasingly "impracticable" as the supply chain has been "significantly" impacted in recent days and as a result, it has begun the orderly and closure of its sites and offices.
The company insisted it has a "strong" balance sheet but said the closures and the need to retain some flexibility for a prolonged period of inactivity mean it has begun talks with its syndicate of six banks about additional committed banking facilities over and above the current ?250m revolving credit facility.
It plans to increase the additional 'accordion' facility of ?50m that is available to it to ?100m. In addition, it has submitted an application to the Bank of England for eligibility for the government's Covid-19 Corporate Financing Facility.
"We are continuing to work proactively to protect our cash flow, and in addition to the measures we announced earlier in the week, we will immediately commence 'furloughing' a significant proportion of our employees under the government's Job Retention Scheme," it said.
Once the supply chain returns to normal and the company deems it safe for the workforce to go back to work, Redrow will reopen sites and pick up production again, with an initial focus on fulfilling its order book.
Executive chairman John Tutte said: "These are unprecedented times. The actions we have announced today will give us the flexibility to manage the business through this turbulent period to ensure we are ready to resume production when it is safe to do so."
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