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Healthcare

BRIEF-Mekonomen Updates On Data Breach And COVID-19 Impact

April 1 (Reuters) - Mekonomen AB:

* UPDATE ON DATA BREACH AND COVID 19 IMPACT ON MEKONOMEN GROUP

* ON CORONAVIRUS: THERE IS A SIGNIFICANT RISK OF FINANCIAL IMPACT DUE TO CORONA VIRUS (COVID 19)

* ON MARCH 28, 2020 COMPANY BECAME AWARE OF DATA BREACHES WITHIN MEKONOMEN GROUP’S BUSINESS AREA MECA/MEKONOMEN

* COMPANY BELIEVES IT HAS ADEQUATE BACK-UPS OF THESE SYSTEMS AND IS IMPLEMENTING ITS DISASTER RECOVERY PLAN

* COMPANY ALSO BELIEVES THAT THEIR CYBER INSURANCE WILL LIMIT FINANCIAL DAMAGE DUE TO LOST REVENUE AND ADDITIONAL COSTS INCURRED

* BREACH HAS CAUSED EXTENSIVE DISRUPTIONS TO IT SYSTEMS WITHIN MECA/MEKONOMEN BUSINESS AREA IN SWEDEN AND NORWAY, WHICH IS ONE OF FOUR BUSINESS AREAS WITHIN MEKONOMEN GROUP

* OPERATIONS IN MECA/MEKONOMEN BUSINESS AREA WITH WHOLESALE OPERATIONS, BRANCHES AND WORKSHOPS IN SWEDEN AND NORWAY HAVE, UNDER CIRCUMSTANCES, WORKED WELL WITH FOCUS ON MINIMIZING IMPACT FOR CUSTOMERS.

* AS A RESULT OF COVID 19 PANDEMIC AND IMPACT OF DATA BREACHES, IT IS VERY DIFFICULT TO FORECAST PERFORMANCE OF COMPANY, BUT WE ANTICIPATE A MATERIAL NEGATIVE IMPACT IN TRADING ENVIRONMENT FOR REST OF YEAR

* BELIEVES THAT AT THIS TIME IT HAS ADEQUATE LIQUIDITY, AS A RESULT OF FAST-CHANGING ENVIRONMENT, COMPANY HAS BEEN EVALUATING ITS LIQUIDITY AND BANK COVENANTS.

* BELIEVES IT WAS IN FULL COMPLIANCE WITH ITS BANK COVENANTS AS OF 31 MARCH 2020; HOWEVER, OUT OF AN ABUNDANCE OF CAUTION IT PRO-ACTIVELY BEGAN DISCUSSIONS WITH ITS BANKING GROUP

* BANKING GROUP HAS AGREED TO RAISE BANK LEVERAGE COVENANT AS OF 31 MARCH AND POSTPONE COMPANY’S PLANNED AMORTIZATION PAYMENT OF EURO 5 MILLION DUE 31 MARCH 2020.

* COMPANY IS IN FURTHER DISCUSSIONS WITH ITS BANKING GROUP REGARDING ADDITIONAL COVENANT RELIEF OR AMENDMENTS FOR FUTURE AS WELL AS POTENTIALLY FURTHER POSTPONING AMORTIZATION PAYMENTS AND EXPANDING ITS BORROWING CAPACITY

* BREACH OF COVENANTS, IF NOT WAIVED BY BANKING GROUP, COULD MEAN THAT COMPANY MAY NO LONGER UTILIZE ITS CREDIT FACILITIES AND COULD LEAD TO AN ACCELERATION OF REPAYMENT DATES OF CERTAIN OF ITS BORROWINGS LEADING TO A LIQUIDITY SHORTAGE Source text for Eikon: Further company coverage: (Gdansk Newsroom)

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