Mango, the renowned Spanish fashion company, has recently made a significant move towards sustainability by signing a €200 million sustainability-linked refinancing deal. This decision aligns with Mango’s commitment to environmental, social, and corporate governance (ESG) criteria, demonstrating their dedication to sustainable practices. The company has extended the maturity date of its syndicated loan, originally set for 2022 and 2023, until 2028. This is the first time Mango has linked the cost of debt to sustainability indicators, marking a milestone in their sustainability journey.

By signing this deal, Mango enjoys several advantages. The extension of the repayment date provides the company with more time to pay off its debt, improving its financial flexibility. Additionally, the agreement includes a new syndicated loan of €200 million. Of this amount, €150 million will be gradually repaid until 2027, while the remaining €50 million serves as a financing facility for capital expenditure investments until 2024. If utilized, this remaining amount can be paid off in a single bullet repayment in 2028.

One notable aspect of this refinancing deal is that the cost of the loan can be reduced based on the achievement of sustainable targets. Mango has committed to reaching ambitious goals, including the use of 100% sustainable cotton, recycled polyester, and cellulose fibers by 2025. They also aim to reduce scope 1 and 2 CO2 emissions by 10%. If these targets are met, the cost of the loan could be reduced, providing further incentives for Mango to prioritize sustainability.

Margarita Salvans, Mango’s CFO, expressed her excitement about this historic transaction. She highlighted that it not only links the cost of debt to sustainability indicators for the first time but also extends the repayment calendar, improves its cost, and doubles the company’s financing capacity. This deal reflects Mango’s commitment to sustainable practices and serves as an example for other companies in the fashion industry.

The refinancing deal was coordinated by CaixaBank, BBVA, and Banco de Sabadell, with participation from Banco Santander, Erste Bank, Deutsche Bank, Ibercaja, and Unicaja. Legal advice for the transaction was provided by the Barcelona-based law firm Broseta, ensuring the smooth execution of the deal.

This strategic move comes as Mango successfully repaid a €240 million credit line that it had acquired at the start of the pandemic in spring 2020. By the end of 2021, the company had achieved a negative net debt of €8 million, demonstrating its financial stability and resilience in a challenging economic climate.

Founded in 1984 in Barcelona, Mango has established a global presence in over 110 countries, operating through its extensive retail network of 2,447 points-of-sale. The company’s commitment to sustainability is further reflected in its collaboration with I:CO, an organization focused on promoting the circular economy. Mango has placed Committed Box containers in select stores, encouraging customers to recycle their clothing and contribute to a more sustainable fashion industry. In fiscal year 2021, the company generated a turnover of €2,234 million, with the online channel contributing 42% of the sales.

Mango’s dedication to sustainability through this refinancing deal exemplifies its leadership in driving positive change within the fashion sector. By prioritizing eco-friendly practices and setting ambitious targets, Mango is paving the way towards a more sustainable future for the fashion industry.

Useful Links:
1. Mango Official Website
2. I:CO Website