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Sodexo To Reimburse $1.6 Billion USPP Debt - Quick Facts

French food services and facilities management company Sodexo S.A (SDXAY.PK) said Thursday that following the recent talks it had with USPP debt holders, it has decided to exercise its right to reimburse its $1.6 billion outstanding debt to ensure independence of action.

The different USPP notes had been put in place between 2011 and 2018 to finance acquisitions in the U.S.

Sodexo noted that with liquidity of nearly 5 billion euros at the end of May, including the recent 1.5 billion euro bond issue in April, it has the resources to finance the reimbursement and maintain a strong financial structure. The Group intends to proceed with this reimbursement before year-end closing.

As per the conditions of the USPP debt agreements, the reimbursement includes a make-whole of about 149 million euros.

Sodexo said that by anticipating the reimbursement of this debt, its future financial costs will be reduced by 198 million euros, of which 52 million euros is in 2021. The average cost of debt going forward will fall to about 1.2 percent, compared to 2.3 percent at the end of the first half of fiscal 2020.

Following this operation, Sodexo will have no covenants and will retain full agility to navigate in these uncertain times. The company said it will continue to have an active policy of debt-financing going forward.

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