17th Apr 2020 13:57
(Alliance News) - Gym Group PLC on Friday said it has raised GBP41.3 million through the issue of 27.5 million shares at 150 pence each.
The placing price represents a discount of 6.8% to the Thursday closing price of 161p. The stock was trading 1.9% higher at 164.07p each on Friday afternoon in London.
The gym operator said directors subscribed for a total of 85,577 placing shares, with founder John Treharne subscribing for 16,666 shares and therefore taking his stake in the company to 2.2%. Certain members of the executive team also subscribed for an additional 29,998 shares, the company said.
On Thursday, Gym Group said it intends to raise funds through the issue up to 19.9% of its issued share capital with the new cash to be used to strengthen the company's balance sheet and provide liquidity while all its 179 sites are closed as part of efforts to combat the spread of Covid-19. As at the end of March, the company had cash of GBP22.4 million.
"We are grateful for the support in these unprecedented times and are confident that the business now has sufficient liquidity to weather the board's most pessimistic trading scenario. We continue to believe in the long term attractive fundamentals of the low cost gym sector and our strengthened balance sheet will enable us to take advantage of growth opportunities that arise in the immediate aftermath of the crisis," said Chief Executive Richard Darwin.
Following admission of the new shares, Gym Group will have 165.8 million shares in issue.
By Ife Taiwo; [email protected]
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