Piccolino owner the Individual Restaurant Company (IRC) is to raise £2.1m through a share offering to pay down debt.
IRC, which is listed on the Alternative Investment Market, renegotiated its banking facilities with Lloyds in March 2008.
However the extension was based on the future profitability of the group, which has been squeezed as consumers eat out less during the recession.
Although the restaurant group has subsequently renegotiated its £18.5m overdraft facility, it is required to make a series of payments reflecting the change in circumstances and lower than projected profitability.
Although the company can meet this commitment, it wants to raise new funds to pay down debt and create headroom to take advantage of any future opportunities for new sites within a weakening commercial property market.
Despite this ambition, IRC plans no new openings in the first half of its current financial year, and will only launch new sites during the second-half financed primarily from cash-flow.
By Chris Druce
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