City Pub Group has raised £15m by successfully placing 30,000,000 new ordinary shares in a move following "strong demand" from existing shareholders and other institutional investors.
In a statement released today Clive Watson, executive chairman of the group, 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."
Watson also confirmed that the additional funds will also allow improvements to the group's operational structure during the period of closure, enabling them to grow the business and recover shareholder value once pubs are permitted to reopen.
In the result of placing announcement, shareholders were encouraged to submit their form of proxy rather than attend the meeting in person, in light of government health advice in response to the coronavirus outbreak..
City Pub Group, which launched in 2011, has a portfolio of 47 pubs in cities and market towns south England and Wales and is known for its quality beer, food and relaxed friendly atmosphere. In September 2019 the group said that further expansion plans were being ‘reined in' over Brexit uncertainty concerns.
In a similar move, SSP Group announced this week that it had proposed equity raising and was taking "decisive and immediate action to preserve cash and ensure sufficient liquidity".
"Food and travel experts" SSP, which operates 550 brands across major transport hubs in the UK, announced that, subject to terms and conditions, had agreed a new "up to £112.5m 18-month committed bank facility with HSBC Bank plc, Lloyds Bank plc and National Westminster Bank plc", which represents incremental financing to its existing debt facilities.
The group confirmed it was "confident in its ability to meet its covenant thresholds as at 31 March 2020."