24 Apr 2020

DWF secures additional credit facility to see it through 'extended lockdown'

UK's largest listed law firm boosts working capital facilities to £122m and secures easing of some covenants

Pic of Leaitherland

CEO Andrew Leaitherland led DWF through its listing last year and subsequent acquisitions.

Top 30 listed UK law firm DWF has secured an additional £15m credit facility to help see it through an extended lockdown.

The firm said today it had reached an agreement in principal with its lenders to establish a secondary revolving credit facility (RCF) of £15m under the same terms as its existing £80m RCF.

Some covenants with its lenders have also been relaxed to provide the firm with the ‘appropriate headroom to deal with any COVID-19 headwinds throughout the coming year’.

The firm said while it didn’t need to make immediate use of the facility it would provide greater liquidity ‘when the normally high level of seasonal cash collections could be impacted by COVID-19’.  

In a profit warning issued by the firm on 27 March, the firm said key markets had been impacted in the most import quarter for growth — its fourth quarter, ending on 30 April.

The firm, which has a workforce of 4,200 and 33 offices across the world, said the new agreement meant it would have total working capital facilities of £122m. It said it was confident the additional banking arrangement combined with an ongoing — and accelerated cost cutting programme — would see it through an extended lock-down.

CEO Andrew Leaitherland said: “While activity levels in some areas of our business have reduced due to COVID-19, we are beginning to see an increase in activity and revenue opportunities in other areas, including insurance.

“We continue to win new appointments, including to BT's new legal panel, which will provide access to more complex work in addition to our Managed Services contract. We are also seeing a growing interest in our managed services offering, as clients take cost out of their business at this critical time.”

The Covid-19 crisis has hit the firm as it is bedding down two acquisitions — that of Chicago-based managed services business Mindcrest and Spanish law firm RCD —  and the hiring of 28 new partners in recent months.

Also known to have increased their access to capital — by way of seeking additional funds from their partners — are Allen & Overy and Cuatrecasas.

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