29th Apr 2020 17:50
(Alliance News) - JD Wetherspoon PLC on Wednesday said it intends to raise GBP141 million through the placing of up to 15.7 million shares, as it cancelled its final dividend payout for financial 2020.
The FTSE 250-listed company said the placing will be conducted through an accelerated bookbuild in which Investec Bank PLC will act as sole bookrunner.
In conjunction with the placing, Chief Executive John Hutson, Finance Director Ben Whitley, Chair Tim Martin, and other members of the management team have agreed to subscribe for shares worth a total of GBP300,000.
The new cash will be used for additional liquidity amid the period of disruption caused by Covid-19 with the assumption that the company's pubs will remain closed until late June.
Separately, the company said that like-for-like sales fell by 4.5% in the week to March 15 and no sales were recorded since March 20 due to government-enforced closures.
Like-for-like sales for the six months to January 26 was up by 5% from the year prior and in the six weeks to March 8 was up 3.2% year-on-year.
Wetherspoons said that in addition to the equity fundraise, it has implemented measures to preserve liquidity such as furloughing 99% of its staff, reducing board salaries by between 38% to 50%, cancelling its interim dividend payout, as well as deferring capital expenditure, tax and rent payments.
It added that it does not intend to propose a final divided for its financial year to July 26.
It also said that while it believes it is not eligible for the UK government's Covid Corporate Financing Facility, it may be eligible for a loan of up to GBP50 million under the new Coronavirus Large Business Interruption Loan Scheme.
The company had net debt of GBP836 million as at March 22 and has now fully drawn down its revolving credit facility.
Shares in the pub operator closed 10% higher at 957.50 pence each on Wednesday in London, giving it a market capitalisation of GBP1.00 billion.
By Ife Taiwo; [email protected]
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