Tabcorp waives debt pledge to strengthen liquidity during Covid-19

Tabcorp will not pay a final dividend for 2020 having waived its debt covenants with lenders as the Australian operator seeks to navigate the Covid-19 crisis.

Tabcorp shares halved at the height of the coronavirus pandemic after sporting events were cancelled, racetracks shut down and retail betting and lottery outlets were forced to close.

Updating investors on Tuesday, the ASX-listed operator revealed lenders representing A$2.2bn in loan facilities had agreed to waive leverage and interest cover due on 30 June and 31 December.

Tabcorp has already moved to cut costs by furloughing 700 staff, while remaining full-time employees have been reduced to four-day working weeks.

Technology contractors were also reduced by 40% in April, while CEO David Attenborough has taken a 20% salary cut until July.

Attenborough said: “We welcome the support of our syndicate banks during this challenging period.

“The waivers complement recent actions we have taken to preserve our liquidity and mitigate the financial and earnings impacts of Covid-19.

“Tabcorp continues to work proactively and collaboratively with all our stakeholders to emerge from the Covid-19 period as strongly as possible,” he added.

Tabcorp now has A$820m in available liquidity, up from A$749m in April, which analysts have suggested is due to deferred tax payments across its Keno and lottery product portfolio.

Tabcorp finished 25^th in the EGR Power 50 2019 rankings.