Informa launches share issue and suspends dividend in coronavirus crisis move
Exhibition and media group Informa today launched a share issue worth 20 per cent of its existing capital and suspended its dividend as it looked to bolster its balance sheet during the coronavirus crisis.
The company, which is also applying for the Bank of England’s covid corporate finance facility, said the placing of up to 250.3m new shares will increase its total liquidity to more than £2.3bn.
Informa said the impact on its events businesses, which generate around 65 per cent of revenue, has worsened significantly since the initial first-quarter disruption in China, with no events taking place in April, the company said.
Informa expects this reduced level of activity to stretch through the second and much of the third quarter, “with a gradual and phased recovery from Q3 into the final quarter of the year”.
The company said it had rescheduled 60 large and 350 small events, worth £460m in revenue, to the last four months of the year.
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It has also cancelled or rephased events that would have generated £150m in revenue.
Informa said cost cutting measures such as pausing recruitment, reviewing consultants and contractors and pay cuts for managements had led to more than £130m in annualised savings so far.
It said it is in talks over a covenant waiver for its US private placement debt.
Chief executive Stephen Carter said: “Since the beginning of 2020, the impact of the covid-19 pandemic has become progressively deeper and more far-reaching than initially predicted.
“We have continued to adapt and respond quickly, always prioritising the safety of colleagues and customers, making decisions for the long-term value of our brands and businesses and seeking to preserve jobs and invest in our intellectual property.”
He added: “In the near-term, we are facing material disruption in our events-related businesses, with expectations for a gradual and phased recovery.
“Today we are taking action to stay ahead of this by building further stability and strength across our business. Through a range of measures, further reducing direct and indirect costs, supporting colleagues and fully securing our finances, we are ensuring we can continue to manage Informa in the best interests of its long-term stability and strength.”
Informa shares rose 1.8 per cent to 424p today.