European OTA eDreams ODIGEO has won the backing of lenders to support a revolving credit facility despite a 70% slump in March bookings.
The company made the disclosure over the Super Senior Revolving Credit Facility (SSRCF) to emphasise its “strong financial and liquidity position” in the face of the coronavirus pandemic.
The group has current liquidity of around €140 million despite last month’s deterioration in bookings.
Savings of 23% have been made through cuts in personnel costs, gross IT, external fees and travel expenses.
This percentage increases to 25% once capital expenditure savings are factored in, decreasing annual cash needs by €28 million.
The company has also accessed European government support, with staff payroll costs cut by 20% for most non-customer facing rolls.
“To conserve cash and emerge from the crisis in a very strong position the cost base has been reduced and operations re-organised whilst the Covid-19 situation continues to enable the company to protect all employee’s jobs,” eDreams ODIGEO added.
“Management has always adopted a prudent approach to its cost base and capital expenditure and, with the benefit of its cash generative model has maintained a strong financial position.
“Stress tests have been carried out assuming significant reduction in bookings from now until last week of February 2021 – i.e. no recovery – and there are no debt repayments due until 2023.
“Interestingly, we are seeing significant evidence of loyalty to our brands and therefore our scenario planning may well be proven in the future to be too prudent.
“Management remains focused on continuing to take the right actions to maintain its cash and liquidity position, retaining its team members throughout and ensuring the business is primed to welcome customers back once it is safe for restrictions to be lifted.
“The group has extremely strong products, services and customer relationships that will allow it to grow significantly when the activity returns.”
Chief executive Dana Dunne said: “This is a challenging moment for all countries, industries and above all us as individuals.
“eDreams ODIGEO is a very strong company both financially and culturally and the waiver of covenant by the SSRCF lenders demonstrates that.
“We have continually managed the business prudently, which has put us in the position to see through these challenging times.
“We believe that through these situations there are opportunities and the company has been focusing on being in an even stronger position once the market returns.”