Mango signs €200 million sustainability-linked refinancing deal
Spanish fashion company Mango continues to demonstrate its commitment to sustainability. After closing 2021 successfully with a good financial structure, the company has just extended the maturity date of its syndicated loan, scheduled for 2022 and 2023 and with an outstanding balance of €236 million, until 2028. The company has linked the transaction to its ESG (environmental, social and good corporate governance) criteria. The transaction was led by CaixaBank.
The deal signed on Wednesday, April 19 enables the company to extend its repayment date, improve the cost of its debt and double the availability of revolving credit lines. The agreement also includes a new syndicated loan of €200 million from which €150 million will be amortized on a straight-line basis until 2027, while the remaining €50 million are part of a financing facility that can be used until 2024 for capex investments and could be paid off in a single bullet repayment in 2028 if drawn down.
However, the cost of the loan could be reduced if sustainable targets are met. The company must achieve 100% use of sustainable cotton, recycled polyester and cellulose fibers by 2025, as well as reduce scope 1 and 2 CO2 emissions by 10%.
"This is a historic transaction for the company. Not only is it the first time that we’ve linked the cost of debt to sustainability indicators, but we have also managed to extend the repayment calendar, improved its cost, and doubled our financing capacity," said Margarita Salvans, CFO of Mango.
In addition to CaixaBank, the transaction was coordinated by BBVA and Banco de Sabadell. Banco Santander, Erste Bank, Deutsche Bank, Ibercaja and Unicaja also participated in the transaction, while the Barcelona law firm Broseta served as legal advisor.
This strategic move comes at a time when Mango has just completed the full repayment of the €240 million credit line requested in spring 2020, at the beginning of the pandemic, to the Official Credit Institute (ICO). At the end of 2021, the company had a negative net debt of €8 million.
Founded in 1984 in Barcelona, Mango is present in more than 110 countries through a retail network of 2,447 points-of-sale. Its latest sustainable projects include a collaboration with the company I:CO aimed at promoting circular economy by placing Committed Box containers throughout a selection of its stores allowing clients to recycle their clothing. In fiscal year 2021, Mango generated a turnover of €2,234 million, up 21.3% year-on-year, with the online channel accounting for 42%.
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