InterContinental Hotels Group PLC (LON:IHG, NYSE:IHG) said it has agreed further extensions to its debt terms with its lenders.
The Holiday Inn owner also said a change in its treatment of certain revenue from licensing of intellectual property will add around US$22m to operating profit for this year.
These changes are effective from January 1, 2020 with amounts recognised in prior years unchanged.
After previously announcing waivers to its debt covenants out to June 2021, FTSE 100-listed IHG today announced the extension of the waiver to December 2021 and a relaxation of the covenants after that.
The covenant will now require net debt to be less than 7.5 times EBITDA at June 2022 and less than 6.5 times at December 2022, with a minimum liquidity covenant of US$400mln remaining in place throughout.
The covenant relaxations have been “based on a theoretical severe downside scenario”.
Broker Peel Hunt said on its forecasts, IHG will remain “well inside” these limits.