Pub chain JD Wetherspoon has raised approximately £141m through a share placing and has said it is starting to plan for a reopening of its sites in late June.
In an update, the company said the proceeds of the placing and subscription will be used to strengthen its balance sheet, working capital and liquidity position.
It said the additional capital will provide liquidity to deal with very low sales after reopening, as it anticipates a gradual recovery in customer numbers and assumes initial sales will be about 15% below pre-closure levels. The placing included 15,668,430 new ordinary shares and subscription of 15,701,760 new ordinary shares.
The business also said its opening programme has been stopped and is not expected to restart until 2022, from which point the company intends to open approximately five pubs each year. Around 43,000 employees, more than 99% of the workforce, have been furloughed. The company estimates that it has sufficient liquidity until the end of November.
Chairman Tim Martin (pictured) has volunteered to take a 50% pay cut and the company's interim dividend has been cancelled. Meanwhile, most of its March rent has been deferred and the company has agreed extended payment terms with many landlords and suppliers.
The company expects to be eligible for a loan of up to £50m under the new Coronavirus Large Business Interruption Loan Scheme.
Martin said: "The Covid‐19 outbreak is having a severe impact on the UK pub sector. In these challenging times I would like to thank everyone at the company, its suppliers, landlords, banks and the government for their support and commitment. We've had to take significant action to reduce costs, decisions which have not been taken lightly. We look forward to re‐opening our pubs and hotels and welcoming back our teams in the near future.
"As a result of the actions taken, the co-operation of many stakeholders, and the equity placing announced today, we will be well-positioned to reopen our pubs and to return to growth as the market recovers."