Micro Focus shelves $1.4bn loan deal due to coronavirus
One of the UK’s largest listed technology companies has delayed a $1.4bn debt sale due to market uncertainty caused by the coronavirus.
Micro Focus had been working on plans for the $1.4bn loan — which had initially supported the acquisition of Hewlett-Packard’s enterprise software division — for two weeks.
The decision follows in the wake of similar moves by several other companies, which have had to postpone deals as debt prices and borrowing costs have risen.
Micro Focus said in a statement that it had postponed the proposed refinancing “due to adverse market conditions”. The plans related to its existing senior secured term loan and revolving credit facility, the former of which was due in November next year.
“The company intends to relaunch the refinancing once market conditions improve,” it added.
Micro Focus is also facing the continued fallout of the departure of its long-term chairman Kevin Loosemore, who was considered the mastermind behind its transformation into a FTSE 100 giant.
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Micro Focus specialises in buying older, low-growth software products and cutting costs to boost profitability. The company failed to make the Hewlett-Packard deal work however, which led to steep falls in its share price last year.
Micro Focus has previously said it does not expect its financial performance to improve until 2021. Its share price closed down five per cent at 701p.