8th Apr 2020 18:35
(Alliance News) - Restaurant Group PLC on Wednesday said it intends to raise funds through the placing of up to 19.9% of its existing share capital, as it expects a "significant" decline in annual earnings due to the Covid-19 outbreak.
The pub and restaurant chain operator said the placing will be carried out through an accelerated bookbuild with JP Morgan Securities PLC acting as sole bookrunner.
Restuarant Group said it believes footfall in its venues will recover slowly throughout the
rest of 2020 following the lifting of lockdown restrictions. It predicts that group sales will decline by around 50%, with like-for-like sales expected to fall by around 45%.
It added that it has implemented cash conservation measures such as reducing capital expenditure to no more than GBP30 million for the year, taking advantage of the government furlough scheme and placing Food & Fuel and Chiquito into administration.
Restaurant Group said it has secured a GBP15 million increase in its Santander super senior revolving credit facility to Wagamama from GBP20 million to GBP35 million. It also said it intends to raise additional funds through the placing of around 19.9% of it existing share capital.
The company said the placing will provide it with additional liquidity to allow it to continue operating through the period of disruption.
Restaurant Group expects adjusted earnings before interest, tax, depreciation, and amortisation for its financial year ending December 27 to be between GBP45 million and GBP55 million, with net debt in the region of GBP310 million to GBP320 million. For comparison, adjusted Ebitda for the year to December 29, 2019, was GBP136.7 million and net debt at period end was GBP286.6 million.
The stock closed 41% higher at 59.90 pence each on Wednesday in London. However, one year ago, the stock was trading at 166.40p each.
By Ife Taiwo; [email protected]
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