Greene King to raise more than £200m to pay off debt and buy pubs

23 April 2009 by
Greene King to raise more than £200m to pay off debt and buy pubs

Brewer and pub operator Greene King hopes to raise more than £200m through a rights issue to pay off debt and buy up properties from struggling rivals.

The company is to issue 80,749,647 new shares priced at £2.70 each, in an attempt to raise £207.5m.

Greene King said it would use the money to make selective acquisitions of pubs in the Home Counties, London and Scotland, as well as repurchasing some of its securitised debt to take advantage of current credit market conditions.

Chief executive Rooney Anand said: "Today's rights issue will enable us to take advantage of a compelling opportunity both to enhance our estate and further strengthen our sound capital position."

The company said that despite worsening economic conditions trading like-for-like sales at the group in the 49 weeks of its current financial year were ahead of last year.

Mark Brumby, leisure analyst at Blue Oar Securities, described the rights issue as "a smart move" and said it was unlikely to be the last in the pub sector.

Greene King is expected to be contacted by Punch Taverns, which, in recent months, has been selling off its pubs in a bid to pay off debt.

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By Chris Druce

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