Construction company YIT says that it has received a loan of 140 million euros from the banks, with which it will be able to replace the loans of a total of 150 million euros due at the end of the year and next spring.
YIT announced that it had signed a loan agreement with the banks on Tuesday. The new loan matures in April 2025.
According to the company’s press release, the loan agreement contains restrictions on the distribution of funds, which are based on the ratio between YIT’s net liabilities and EBITDA.
The loan agreement contains financial key covenants related to YIT’s solvency, interest margin and debt ratio, i.e. contractual guarantees, which are reviewed either monthly or quarterly.
YIT says that its board has decided anyway to propose to the general meeting to be held in March next year that the company would not distribute a dividend for the current year’s financial year. The board has made a decision on the suspension of the dividend distribution by evaluating the business cycle, the market situation and the company’s estimated cash flow.
CFO of YIT Tuomas Mäkipeska says in the release that the financing arrangement and the decision not to propose a profit distribution will strengthen the company’s financial position and increase the flexibility of the financing structure.
of YIT the financial situation has become tighter this year because it has not been able to sell the apartments it has built due to the housing market’s slowdown.
The company said in its July-September interim report at the beginning of November that the number of its unsold completed apartments rose by 30 percent to 948 during the quarter. The gearing ratio increased to one hundred percent in the third quarter from 69 percent a year ago, but remained stable compared to the second quarter.
Despite the tightened financial position, YIT’s board of directors decided in September to distribute the second dividend installment of last year’s results to the shareholders.
OP Yrityspankki and SEB are the coordinators and main organizers of the new loan agreement. Swedbank participated in the loan agreement as the third main organizer.
The company is also trying to reduce its indebtedness with the change program that started in February to improve the use of capital. The company may sell its assets and operations for around 400 million euros by the end of next year.