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April 20, 2022

Mango inks first finance deal linked to sustainability efforts

Spanish fashion group Mango is underlining its commitment to sustainability, having refinanced its debt and, for the first time in the company’s history, linking it to environment, social and corporate governance (ESG) criteria.

By Beth Wright

Mango says the cost of the loan will reduce if it achieves its sustainability targets of 100% use of sustainable cotton, recycled polyester, and cellulose fibres of controlled origin by 2025, in addition to a 10% reduction in scope 1 and 2 carbon dioxide (CO2) emissions.

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The retailer has agreed with its banking pool to extend the repayment calendar of its main syndicated loan, which has an outstanding balance of EUR236m (US$256.1m), to 2028.

The move sees Mango, which says it closed 2021 with the highest profits in almost a decade and a healthy financial structure, extend the repayment calendar of its financial obligations, improve the cost of its debt, double the availability of revolving credit lines, and introduce sustainability criteria.

CaixaBank managed the transaction, acting as a coordinating agent, agent bank, and sustainability agent, as well as being one of the three bookrunners, alongside BBVA and Banco de Sabadell. The participating banks in the operation were Banco Santander, Erste Bank, Deutsche Bank, Ibercaja and Unicaja.

The operation, which was signed yesterday (19 April), involves the issue of a new syndicated loan for the total sum of EUR200m, of which EUR150m will be subject to straight-line depreciation until 2027. The remaining EUR50m corresponds to a credit line that may be used until 2023 for investments in the company’s CAPEX and which, if executed, will be amortised in a single bullet payment in 2028.

In addition, Mango has agreed with the banks the possibility of doubling the availability of credit lines through two revolving credit facilities for the total sum of EUR200m, which would become available if the company deemed this necessary.

Mango CFO Margarita Salvans says this is a “historic” transaction for the company.

“Not only is it the first time we have linked the cost of the debt to sustainability indicators, but we have also managed to extend the repayment calendar, improve its cost and double our financing capacity”.

A number of brands and retailers have made similar moves with regard to their financing in recent months. German luxury fashion brand Hugo Boss took out a revolving syndicated loan with a sustainability focus for the first time in December, while the John Lewis Partnership signed a GBP420m (US$573.6m) five-year revolving credit facility linked to environmental targets in November.

Meanwhile, Mango recently signed a collaboration agreement with I:CO, a supplier of global solutions for the collection, reuse and recycling of used clothing and footwear, to improve the collection of its customers’ garments in Europe.

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2022: So far In Venture Capital

Global investment in 2022 has been majorly dominated by North America, Europe, and Asia Pacific, whereas the Middle East, and South and Central America have recorded low investments comparatively. In light of this, Europe and North America have been identified as the major destinations for Private Equity and Venture Capital (PE/VC) investments.   GlobalData’s whitepaper analyzes which sectors PE/VC firms have been investing in, looking at Technology, Media, and Telecom, with these sectors recording $356 billion and a deal volume of over 10,000 deals in 2022. Healthcare, Financial Services, Business & Consumer Services, and Construction sectors have also seen high investment activity by PE/VC firms, recording a deal value of over $70 billion each.   But what can this mean for you?   Understand how the Deals Database on GlobalData Explorer can be leveraged to:  
  • Track the Aggregate Investment Volumes in PE/VC-Stage firms across geographies and sectors, in addition to viewing the specific deals that drove these volumes
  • Identify the top investors already active in any sector-Geography combinations
  • Assess the Performance of Financial and Legal Advisors, supporting the Dealmaking in any segment of choice (Customizable League tables)
  • Understand what is driving the PE/VC fundraising (Deal Rationale)
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