Motorhome rental and manufacturing company Apollo Tourism and Leisure (ASX: ATL) has secured $25 million in government loans to help it trade through the pandemic.
Apollo’s cash reserves had been hit hard by global travel restrictions with the company revealing in early May cash had dropped to $12.4 million from $17.3 million at the end of 2019, a burn rate of $1.2 million a month.
To buttress its financial position Apollo sought further government assistance in addition to the JobKeeper employee subsidy.
Yesterday Apollo announced it had come via a two-year $15 million loan from the Federal Government bankrolled by its COVID-19 Export Capital Facility, while the Queensland Government also chipped in with a $10 million loan for an initial period of two years through its Industry Support Package.
“This support will help us navigate through this period of uncertainty, give us the opportunity to create a stronger platform, and continue to employ hundreds of people,” said Apollo Managing Director and CEO, Luke Trouchet.
Prior to receiving the Apollo had embarked on a number of cost saving measures including:
- Reducing staff numbers and working hours.
- Selling its hundreds RV fleet in the United States at an anticipated “book loss” of $12-$12.5 million.
- Hibernating US rental activities until mid-2021.
- Closing its New Zealand RV manufacturing facility.
- Negotiating rent-free or reduced rents for some of its operating sites.
- Scaling back but continuing to manufacture RVs in Australia.
Apollo will announce its FY20 annual results on Monday, 31 August.