Quarto agrees extension of banking facilities

Quarto has secured loans for the company from some of its larger shareholders totalling $13m and signed an agreement with its banking syndicate to extend the final repayment date for these to the end of August 2020. According to the company's c.e.o., the extension of its banking facilities gives the illustrated publisher "a stable position" and will help it to reduce its debt "to a more acceptable level".

In a statement, published on Thursday (1st November) Quarto said the revised facilities incorporate an immediate reduction in bank debt and a subsequent amortisation programme. As part of the agreement, certain larger shareholders and a related company have agreed to provide unsecured and subordinated loans to the company totalling US$13m.

The extension and amendment of its banking facilities will help Quarto to reduce its reliance on bank loans and to provide additional working capital, it explained.

C.e.o. CK Lau said: "We are delighted to have concluded negotiations with our banking syndicate to extend the term of our facilities. This gives us a stable position to continue our focus on improving the performance of the business and reducing debt to a more acceptable level."

The news follows a vote in August in which the majority of the company's shareholders supported a move to increase Quarto's borrowing power, upping this to four times the share capital of the corporation from a previous limit of three times.

In its latest financial results for the first six months of 2018, reported on in September, Quarto reported a group revenue rise of 12% year-on-year to $56.2m (2017: $50.2m) and an improved gross profit margin of 50.1% (2017: 48.2%). It also revealed a new "cost-out programme", involving a review of key areas of expenditure, to achieve "a right-sizing of the group; a path to sustainable debt reduction; a focus on our core strengths; and a disciplined business model".

A dramatic shareholders revolt in May, caused by a row over the publisher’s debt, saw board members axed and ousted founder Laurence Orbach returned as executive chairman of the board. Since this time, Orbach has stepped down from the board.