Peel Hotels agrees five-year term loan facility with Allied Irish Bank

AIM-listed Peel Hotels has entered into a £9.9m five-year term loan facility with Allied Irish Bank.

The facility, which was drawn down in full on Tuesday and attracts an interest rate of 2.7% above Libor, will be used to repay existing facilities with RBS and the remaining balances of the director's loans and loan notes.

Chairman Robert Peel said: "I am delighted that we have closed our new financing arrangements with Allied Irish Bank. We expect this new facility to provide significant savings in the costs of finance and to improve our cash flow and reduce our net debt."

The group said completion of the facility provides "a solid foundation" for it to deliver its strategic plans by preserving the group's debt facilities, resetting financial covenant headroom and extending maturities to five years from the date of drawdown.

The revised financing structure will result in a significant reduction in financial charges going forward, with savings in the 2018/19 financial year estimated to be not less than £160,000, provided that Libor remains unchanged.

At 1050 BST, the shares were down 3.8% to 103.41p.