MEDIA RELEASE
27 MARCH 2023
RMB helps The Foschini Group arrange funding package to drive further growth and local investment
RMB acted as the Joint Initial Mandated Lead Arranger (MLA) and Joint Bookrunner for TFG’s debt syndication, in a material funding package to the value of R14.5 billion. The transaction included the refinancing and upsizing of TFG’s overall debt package, which has enabled TFG to access greater liquidity at more beneficial pricing.
“RMB is proud of our long history with TFG, dating back more than 60 years. Over this period, we have become a trusted advisor on their corporate journey in SA and beyond. Most recently RMB has been a partner to TFG working closely with the management team to optimise their holistic funding package, spanning term debt and shorter tenor liquidity facilities. This included the creation of a new borrower group to optimise the facilities and enable TFG to implement an overall solution that aligns liquidity and term funding with its strategic corporate objectives,” explains Khayakazi Lumingu, Debt & Trade Solutions Transactor at RMB.
It is reassuring and a testament to the appealing credit thesis that TFG represents, that such a large transaction could be timeously concluded given the complexity of aligning multiple market participants across the various facilities. Moreover, the syndication of the overall package will allow TFG to consolidate its funder group and standardise terms across various funders.
“Following the liquidity crunch experienced in the market during the peak of the Covid pandemic, we are seeing extraordinarily strong appetite for high quality credit names, such as TFG, as demonstrated by the oversubscription on this syndication. This is driven by a combination of the scarcity of high-quality credit in the market coupled with funders seeking to defend their existing exposure to key clients. Moreover, new funders are also actively targeting credit exposure to this particular client set. This has driven pricing levels even lower than those prevailing immediately prior to the pre-Covid period,” says Simone Daws, Loan Syndications Transactor, at RMB.
In addition to the improved ease of access to capital and streamlined administrative processes, TFG is now able to benefit from a fit for purpose funding package across its entire borrowing structure as well an appropriate long-term and short-term funding package mix, all of which is split across fewer lenders. This will assist TFG with more flexible cash flow management, simplify finances operationally and enable TFG to deploy the funding for future growth and expansion.
Bongiwe Ntuli CFO at TFG noted: “We are working hard to create greater shared value for the business and all our stakeholders. In the immediate future, we are executing on our organic growth opportunities making market share gains in most of our categories, optimising our local quick response manufacturing footprint to improve supply chain efficiencies, and transforming into a true omnichannel retailer whilst creating meaningful social impact.”
Ntuli continues: “These additional facilities evidence TFG’s strong funder relationships and allow the Group the ability to navigate a challenging global economic environment whilst focusing on growth and maximising our shareholder returns.”
RMB continues to be a key partner to TFG with our advisory role on their acquisition of Tapestry in 2022, which bolstered TFG’s furniture offering and brand portfolio, being a recent example. Accordingly, we are proud to continue our support of TFG in our Lend, Transact and Advise pillars, perfectly aligned to support TFG to achieve their financial and strategic goals,” Lumingu concludes.
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Contact:
Kate Kelly l RMB l kate.kelly@rmb.co.za
