UPDATE 3-USG People changes loan covenants, lowers debt
* Extends net bank debt/EBITDA ratio limit to 3.0 from 2.5
* Sells a portion of trade accounts receivable
* Says measures give more certainty amid current markets
* Shares down 4.9 pct
(Adds CFO's comments, updates shares)
AMSTERDAM, July 2 (Reuters) - Dutch staffing firm USG People (USGP.AS) has changed the terms of its bank borrowings and cut its debt by 50 million euros but said it was never at risk of breaching its covenants. Chief Financial Officer Rob Zandbergen said the measures were aimed at improving its balance sheet and said the company's cost savings programme is also starting to accelerate.
"This new arrangement is starting in the third quarter so it doesn't effect the second quarter. There was never any worry about covenants in the second quarter," Zandbergen told Reuters.
He also said some of USG's markets were improving and that declines in the company's sales in the April and May were in line with the declines seen in March revenues.
ING analyst Marc Zwartsenburg said the measures will bring some relief over USG's balance sheet, but added that it also indicates that market conditions are far from improving either.
"Some caution should still be taken," he said in a note.
Shares in USG were down 4.9 percent at 7.85 euros at 1224 GMT, compared with a flat Amsterdam midcap index .AMX.
USG People, the Netherlands' second-largest jobs company, said it had agreed with crediting banks the adjustments to its bank covenants would take effect in the third quarter and would be valid for a period of little more than a year.
It said the maximum net bank debt to recurring earnings before interest, taxes, depreciation and amortisation (EBITDA) ratio would be raised to 3.0 from 2.5 and the minimal allowable interest coverage ratio would be lowered to 3.0 from 4.0.
The original covenants will come into effect again from the fourth quarter of 2010.
USG added that via factoring, a total of about 50 million euros ($70.55 million) in accounts receivable could be sold. It said the factoring was done at the end of June. Continued...
