City Pub Group plans to raise £22m to strengthen balance sheet
City Pub Group is planning to raise £22m to bolster its balance sheet after the outbreak of coronavirus forced the closure of its pubs.
The firm has already raised £15m through the placing of 30m new shares at 50p each, a 10.7 per cent discount to its closing price yesterday, to certain existing shareholders and institutional investors.
The remaining £7m will be raised through an open offer to qualifying shareholders the opportunity to buy at the issue price.
Shares are up 17.86 per cent.
Last week the government closed all pubs and restaurants as it ramped up social distancing measures to curb the spread of Covid-19.
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Ahead of the announcement, City Pub Group said it would lay off staff across the company as it braced for a decline in footfall.
City Pub Group said it was confident it could maintain its operations for at least another six months without needing a cash injection, even if the government extended its measures and forced temporary closure of all pubs and bars.
City Pub Group’s executive chairman Clive Watson said: “We are delighted with the investor support we have had at this difficult time. Together with our existing funding arrangements, this significantly strengthens our balance sheet providing a further cushion in the event the suspended environment is extended.”
“The additional funds will also allow improvements to our operational structure during the period of closure and enable us to grow the business and recover shareholder value once pubs are permitted to reopen.”