- Part I: Summary
- Part II: Risk Factors
- Impact of general economic conditions
- Staff
- Short term variations in consumer preferences, merchandise selection, inventory and pricing
- Reputation and marketing
- Long term changes in consumer attitudes to jewellery
- Store portfolio
- Competition
- Suppliers
- Raw materials and the supply chain
- Seasonality
- Social, ethical and environmental risks
- Internal controls and systems
- Legal actions
- Regulatory requirements
- US GAAP
- Acquisitions
- Pensions
- Equity and debt financing
- Financial market risks
- Loss of one or more key executive officers or employees
- Implementation of the Proposal
- Market price of Common Shares
- Future sales of Common Shares by existing shareholders
- Dilution to Common Shares
- Rights as a Depositary Interest Holder
- Limitations on the transferability of the Common Shares
- Changes in tax treatment
- Secondary listing
- Consequences of a secondary listing
- Proceedings against Signet Jewelers Limited
- More extensive US regulation of the Company
- Part III: The Scheme of Arrangement and Share Capital Consolidation
- Part IV: Directors, Company Secretary, Registered Office and Advisers
- Part V: Presentation of Statisical Data and Other Information
- Part VI: Information on The Group
- Part VII: Directors and Corporate Governance
- Part VIII: Selected Financial Information
- Part IX: Operating and Financial Review
- Part X: Accountant's Reports and Financial Information
- Part XI: Interim Financial Information of The Group for The 26 Week Period Ended 2 August 2008
- Part XII: Additional Information
- Part XIII: Definitions
1.18 Equity and debt financing
The Group is dependent upon the availability of equity and debt financing to fund its operations and growth. Therefore it prepares annual budgets, medium term plans and headroom models which help to identify the future capital requirements so that appropriate facilities can be put in place on a timely basis. If these models are inaccurate, adequate facilities may not be available.
The Group's reputation in the financial markets and its corporate governance practices can influence the availability of capital, the cost of capital and its share price. The change in credit market conditions during the past year means that the Group's longer term ability to raise debt has decreased, although, in June 2008 the Group entered into a $520 million facility to replace a previous $390 million facility. This facility has, and other longer term borrowings are likely to involve, a greater spread over LIBOR. This could constrain the Group's ability to make distributions to shareholders while taking advantage of the long term growth opportunities such as those provided by Kay, Jared and the rough diamond initiative.
The Group's borrowing agreements include various financial covenants. A material deterioration in the financial performance of the Group in the future could result in a covenant being breached. If the Group were to breach a banking covenant it would have to renegotiate its terms with current lenders or find alternative sources of finance if current lenders required early repayment. Nothing in the above paragraph is intended to qualify the statement in paragraph 3.4 of Part IX "Operating and Financial Review".