The $873.2m (£646m) turnover group has had a torrid time of late after issuing two profit warnings in the space of three months, with CEO Paul Fineman subsequently stepping down in March. 

News that the fresh facilities had been agreed saw the group’s share price jump by 24% in early trading today (6 June) to 61.55p (52-week high: 586p, low: 46.6p).

IG’s revolving credit facility ‘A’ has been reduced to $90m from $95m. Its ‘B’ facility has also reduced, from a maximum of £130m to £92m.

The amendment also requires that any dividends to be paid by the group during the remaining term of the agreement “will require majority lender approval”.

The firm’s directors said they believed the amendments will “continue to give the group more than sufficient headroom to fund its seasonal working capital requirements over the remaining term of the banking agreement”. 

Chair Stewart Gilliland commented: “We are very pleased to have agreed this extension to our facilities and to have the ongoing support of our banking partners. 

“Our seasonal orderbook remains strong and this revised facility provides us with sufficient funding for our working capital requirements.”

There are no other changes to the banking facility limits.

The revised covenants operate up to 31 March 2023 require minimum quarterly EBITDA performance to be within $10m of budget at quarter end, and a minimum liquidity level of $35m of headroom to the maximum facility on a monthly basis. 

It then reverts to the previous covenants from April 2023, while the bank lending margin has increased to 2.5%, and will rise to 3% from 1 June 2023. 

The new agreement involved banking and legal fees of around $1m.

IG Design Group is set to announce its full year results on 28 June.