Carphone Warehouse 2007 Annual Report Download - page 62

Notes to the Financial Statements continued
20 Cash and cash equivalents, loans and other borrowings
Cash and cash equivalents comprise:
2007 2006
£’000 £’000
Cash at bank and in hand 38,088 51,840
Short-term bank deposits and money market funds 72,972 46,253
111,060 98,093
The effective interest rate on bank deposits and money market funds was 4.92% (2006 – 4.54%).
Within cash and cash equivalents and current asset investments, £79.5m (2006 – £77.0m) is held by the Group’s insurance business to cover regulatory reserve
requirements. As such, these funds are not available to offset other Group borrowings.
Loans and other borrowings comprise:
2007 2006
Current: Maturity £’000 £’000
Bank overdrafts On demand 12,170 21,136
Other uncommitted bank loans On demand 10,000 20,039
Loan notes On demand 483 15,558
22,653 56,733
Non-current:
£450m revolving credit facility 2009 60,000 40,000
£50m term loan 2010 50,000 50,000
£225m term loan 2011 223,733 230,054
£375m term loan 2011 373,904 –
707,637 320,054
All borrowings are unsecured.
Bank overdrafts and other uncommitted bank loans:
The Group has a variety of overdraft facilities in Sterling, Euro and other European currencies. These facilities are domiciled in various countries and interest is
charged at the standard overdraft rates applicable in the countries concerned. Some of the Group’s major banks make uncommitted facilities available to assist
with short-term liquidity management. These facilities bear interest based on the appropriate local interest rates. All of these facilities are repayable on demand.
Loan notes:
The Group has issued a number of interest-bearing loan notes. These loan notes are repayable on demand and expire between 2012 and 2015. No new loan
notes were issued during the period (2006 – £2.4m) and £15.1m (2006 – £6.6m) were redeemed or cancelled.
£450m Revolving Credit Facility (“RCF”):
The RCF was signed in September 2004 and the amount available was increased from £300m to £450m in the prior period. The facility is repayable in full in
September 2009. The interest rate payable in respect of drawings under this facility is at a margin over LIBOR for the relevant currency and for the appropriate
period. The actual margin applicable to any drawing depends on the ratio of debt to EBITDA calculated in respect of the most recent accounting period. A non-
utilisation fee is payable in respect of amounts available but undrawn under this facility. Covenants are included in this facility that limit the ratio of debt to EBITDA,
interest cover and fixed charges (interest and operating lease expenditure) cover. The Group was in compliance with these covenants at the period end.
£50m term loan:
The five-year bi-lateral £50m term loan, which was signed in December 2005, is fully drawn in Sterling. The interest rate is calculated in a similar manner to the
£450m RCF. The loan is repayable in full in December 2010. The covenant package is identical to that in the £450m RCF.
£225m term loan:
The £225m term loan, which was signed in February 2006, is fully drawn in Euro. The interest rate is calculated in a similar manner to the £450m RCF. The loan
is repayable in full in February 2011. The covenant package is identical to that in the £450m RCF.
£375m term loan:
In October 2006, the Group agreed a new term loan facility of £375m to assist with the acquisition of AOL’s UK internet access business. The maximum term of
this facility is seven years comprising a five year initial term and two one-year extension options, which are exercisable at the discretion of the bank group. If both
extension options are exercised, the final maturity date will be October 2013. The terms of the new facility are similar to the Group’s other committed bank facilities,
and the covenant package is identical to that in the £450m RCF.
The Carphone Warehouse Group PLC Annual Report 2007
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