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Aggreko to start Olympics talks after games postponed
24th Mar 2020 14:05
(Sharecast News) - Aggreko said it was entering talks to work out details of its contract to supply the 2020 Tokyo Olympics after the games were postponed because of the coronavirus crisis.
The FTSE 250 has a contract worth about $250m to supply power for the games, whose chances of going ahead have looked increasingly rocky as Covid-19 has spread. Aggreko said it had received $98m in milestone payments under the contract.
Japan and the games' organising committee postponed the tournament on Tuesday until the summer of 2021 at the latest to safeguard the health of athletes and everyone involved. They were under increasing pressure to do so as the Covid-19 crisis mounted.
Aggreko said its contract with the organising committee provided a framework for talks but that commercial terms and the operational impact need to be worked through with the committee. The company said it was in a strong financial position to deal with the games' postponement.
"We have considered a range of scenarios to stress-test the group's liquidity position through to the end of this year, including the situation in which the games do not take place this year," Aggreko said. "These show that even in a reasonably probable worst case scenario, with appropriate mitigating actions, we expect to remain within the group's financial covenants, while maintaining headroom under our existing committed facilities."
Aggreko provides power generators for events ranging from the Glastonbury pop festival to the Ryder Cup golf tournament. The company stuck by its financial guidance on 3 March as long as the games took place as planned but pulled its guidance and scrapped its dividend on Monday.
The FTSE 250 has a contract worth about $250m to supply power for the games, whose chances of going ahead have looked increasingly rocky as Covid-19 has spread. Aggreko said it had received $98m in milestone payments under the contract.
Japan and the games' organising committee postponed the tournament on Tuesday until the summer of 2021 at the latest to safeguard the health of athletes and everyone involved. They were under increasing pressure to do so as the Covid-19 crisis mounted.
Aggreko said its contract with the organising committee provided a framework for talks but that commercial terms and the operational impact need to be worked through with the committee. The company said it was in a strong financial position to deal with the games' postponement.
"We have considered a range of scenarios to stress-test the group's liquidity position through to the end of this year, including the situation in which the games do not take place this year," Aggreko said. "These show that even in a reasonably probable worst case scenario, with appropriate mitigating actions, we expect to remain within the group's financial covenants, while maintaining headroom under our existing committed facilities."
Aggreko provides power generators for events ranging from the Glastonbury pop festival to the Ryder Cup golf tournament. The company stuck by its financial guidance on 3 March as long as the games took place as planned but pulled its guidance and scrapped its dividend on Monday.