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Marie Brizard solves immediate cash flow needs

French drinks group Marie Brizard Wine & Spirits (MBWS) has signed an agreement with its majority shareholder to finance its immediate cash flow requirements for 2020, which have come about “in particular from past losses”.

Marie Brizard Wine & Spirits has secured financing from its majority shareholder COFEPP

Compagnie Financière Européene de Prises de Participations (COFEPP), which owns approximately 51% of MBWS, has agreed, subject to conditions, to give MBWS the cash flow it needs as a result of previous sales declines and difficult trading conditions in Poland, among other issues the company has faced.

The move comes following several unsuccessful attempts by MBWS to obtain financing from third-party sources.

In November last year, MBWS reported a 1.5% organic net sales decline for the first nine months of 2019. The group said at the time that it expects earnings before interest, tax, depreciation and amortisation (EBITDA) for the full 2019 financial year to be a loss totalling between €20 million (US$22m) and €25m (US$27.6m).

Subject to conditions, including the prior agreement of MBWS’s bank lenders, COFEPP will grant MBWS two finance arrangements in the form of current account advances.

The first will be a current account advance worth €15m (around US$16.8m), which will be made available to MBWS by 17 January 2020, including, under certain conditions, €7.4m (around US$8.3m) for the group’s activities in Poland, and €7.6m (around US$8.5m) for MBWS France, to cover the cash flow requirement until mid-March 2020.

The second current account advance of €17m (around US$19m) will be made available to MBWS by 17 March 2020 to be used for the business’s general cash flow requirements.

The advances have been secured by several guarantees on MBWS’s assets, in particular the Sobieski, Marie Brizard and William Peel brands, in addition to a pledge on the shares of MBWS France, Cognac Gautier and Vilniaus Degtiné.

The second advance has also been agreed on the contingent of an agreement in principle of the public creditors, the amendment of a contract for the bulk supply of Scotch whisky concluded with an MBWS supplier, and the stability of estimated cash requirements for 2020.

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