FRANKFURT (Reuters) - German electronics retailer Ceconomy CECG.DE said it will apply for state-backed loans, suspend rental payments, and put employees on short-time working after the corona pandemic pushed it into an operating loss in the fiscal second quarter.
The German retailer said the closure of retail branches in March had caused business to stall, forcing it to exhaust its credit facilities including a 550 million euro ($598 million) syndicated loan and credit facilities totalling 430 million euros.
“To increase our financial flexibility and ensure access to additional liquidity in an unprecedented time, Ceconomy has applied for a revolving credit facility from KfW,” the company said, referring to Germany’s state-owned lender.
The company has preventively suspended rental payments at all currently closed stores for April 2020, and 20,000 employees have been put on short-time work in Germany.
The management boards of Ceconomy and MediaMarktSaturn, as well as senior managers and employees, will waive part of their base salary, the company said.
Ceconomy said lockdown measures in Germany had caused sales, adjusted for currency effects and portfolio changes, to fall by 6.6% and triggered an adjusted loss before interest and taxes for its second quarter of 131 million euros.
The group said it had seen a 98% increase in online purchases, including of home office equipment and other products such as gardening equipment and fridges, in March.
Ceconomy is due to publish full second-quarter 2019/20 results on May 14, 2020.
Reporting by Edward Taylor; Editing by David Evans and Jan Harvey
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