As part of its most recent refinancing measures, the Spanish clothing retailer Mango agreed on a loan for the first time, the terms of which are linked to compliance with sustainability goals. In this way, the company managed to reduce its interest burden, Mango explained on Wednesday. At the same time, in recent negotiations with its partner banks, the clothing supplier managed to “extend the term of its most important syndicated loan to 2028 and increase the availability of new revolving credit lines”.
In order to receive the planned financial relief, the company must now implement a number of specific requirements: “Borrowing costs will be reduced if, by 2025, 100% use of sustainable cotton, recycled polyester and cellulose fibers from controlled origins and a 10% reduction in scope 1 and Scope 2 CO2 emissions is achieved,” explained Mango.
Chief Financial Officer Margarita Salvans praised the agreement: “This is a historic transaction for our company,” she said in a statement. “Not only have we linked the cost of debt to sustainability indicators for the first time, but we’ve also managed to extend the maturity schedule, improve costs while doubling our funding capacity.”
The clothing supplier also announced that it had completely repaid a loan that had been granted as part of the state Corona aid program. “The total amount requested in spring 2020 was 240 million euros, which the company never used but kept on its balance sheet as a precautionary measure,” explained Mango. The first half of the sum was repaid last December, and the company said it was able to repay the remaining 120 million euros on Wednesday.