The Restaurant Group (TRG) is hoping to raise £175m towards expanding its Wagamama and pubs portfolios and improving its liquidity headroom.
This will see a firm placing of 95,299,430 new ordinary shares and a placing and open offer of 79,700,570 new ordinary shares at a price of 100 pence per share.
In its financial results for the 52 weeks ended 27 December 2020 TRG said its Wagamama and pubs businesses had performed particularly strongly. It plans to roll out a further 180-200 Wagamama restaurants across the UK, to create 20-30 delivery kitchens and to expand internationally, as well as grow its pubs business from 78 to 140-160 sites.
TRG reported total revenues in the year were down 57% to £459.8m and a statutory loss before tax of £127.6m, compared to a loss of £37.3m in 2019, although its restructured leisure business showed improved like-for-like sales growth for the first time in five years when venues were able to open.
Over the past year the group has restructured, which saw it exit approximately 250 sites, including through a company voluntary arrangement (CVA) which primarily affected its Frankie & Benny's brand, and the administration of Chiquito and Food & Fuel, leaving it with around 400 sites.
Chief executive Andy Hornby said: "The Covid-19 pandemic has presented enormous challenges for our sector, but the TRG team has responded decisively to re-structure our business and preserve the maximum number of long-term roles for our colleagues. TRG is operationally a much stronger business than 12 months ago.
"The capital raising, announced today, will significantly strengthen the group's balance sheet and provides TRG with the flexibility to invest in growing our business. While the sector outlook remains uncertain, and we are mindful of continuing restrictions across the UK, we are confident that the actions announced today will allow us to emerge as one of the long-term winners."