El Corte Inglés reaches deal to refinance €3.8bn of debt

The Spanish department store chain El Corte Inglés has reached an agreement with its creditor banks to refinance 3.8 billion euros of its debt. That figure represents 76 percent of its outstanding loans, which stand at around 5 billion euros, according to company sources.

The deal the company has signed up to with Banco Santander, BBVA, Banco Sabadell, La Caixa, Bankia and Banco Popular, will run until 2021. The distribution group said it was hoping to receive the same support from its remaining creditor banks, given the “confidence” that the company is offering to those that are already taking part in this operation.

“Improved financing”

The firm, whose president is Isidoro Álvarez, said that the deal will give it “greater flexibility and an improved financing structure in terms of costs and repayments.” These two factors, it added, will allow it to push forward with its development plans. El Corte Inglés used the services of Morgan Stanley to negotiate the process, which began in May of this year.

In its statement, the firm also pointed out that its turnover is currently at around 15 billion euros a year, and that its portfolio of properties — which are, it said, situated in “unrepeatable locations” — are valued at more than 18 billion euros by Tinsa, one of the biggest valuation firms in Spain.

According to official data from 2012, the commercial network of the group is made up of 83 department stores, 39 Hipercor hypermarkets, 253 convenience stores (Supercor, Supercor Exprés and Opencor), 68 Sfera clothing retailers and 107 Óptica 2000 opticians, among other stores.