Brewer Shepherd Neame has agreed a new £25million borrowing facility to protect it from the impact of the lockdown.

The Faversham company hopes to have two-thirds of its more than 300 pubs trading again by the end of July - with the first batch opening this Saturday.

But while its beer sales in supermarkets during the crisis saw "significant" growth, the close of its pubs and restaurants have hit it hard.

Over the past three months, it has furloughed staff and directors all agreed a temporary 20% pay cut. In addition it has confirmed there will be no cash bonuses paid this year and no pay rises will be permitted across the company.

And its board has now agreed with its banking lenders Lloyds Bank and Santander to increase the group's overall debt facilities utilising the government's Coronavirus Large Business Interruption Loan Scheme (CLBILS).

The banks will provide the group with a £25m revolving credit facility of which £15m is committed and the further £10m available on request.

With the new facilities in place, the group will have total debt facilities of £132.5m.

An agreement with HMRC will also allow the firm to defer the payment of tax liabilities in the final quarter of the financial year - expected to be around £11m. The brewer expects to settle that bill within the next 12 months.

The company said: "With the new facility in place, the board is confident that the group will have sufficient liquidity and headroom for the foreseeable future.

"The business is therefore in a position, backed by its 85% freehold base, to re-emerge strongly from the crisis and take advantage of opportunities that present themselves."

As a result of the new deal, shareholders will not receive any dividends in October or next March.

With the relaxation of social distancing rules, from two-metres to one, it expects at least 45 managed pubs out of a total of 69, and 165 tenanted and leased pubs out of a total 239, will reopen by the end of July.

Chief executive Jonathan Neame said: “This is the first time in the company’s long history of over 300 years that our business has been interrupted. As a strong independent family business with a significant local presence, we have tried to do the right thing for our team and our community.

"We have a clear strategy, a well-balanced business and now a robust financing structure in place to see us on the path to recovery. We are optimistic that we have a strong long term future as and when this pandemic subsides.

“Our whole team cannot wait to welcome our customers back to our unique and wonderful pubs over the next few weeks.”

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