17th Apr 2020 16:59
(Alliance News) - Foxtons Group PLC on Friday said it has completed a GBP22.0 million fundraising to avert a liquidity crisis in the event the UK government-imposed lockdown lasts until the end of August and is followed by a slow recovery in London housing market.
Shares in the company closed up 22% at 47.00 pence each in London on Friday.
Foxtons said it issued 55.0 million new shares at 40p each. The placing price represents a premium of 4.2% to 38.4p share price on Thursday.
The placing proceeds will be used by Foxtons to repay the GBP5 million loan and will provide sufficient liquidity to support the business through the period of disruption.
All Foxtons directors, both executive and non-executive, participated in the share placing, it said.
Nic Budden subscribed for 150,000 shares, Ian Barlow subscribed for 100,000 shares, Richard Harris subscribed for 60,000 shares, Sheena MacKay subscribed for 30,000 shares, Alan Giles subscribed for 7,112 shares, while Rosie Shapland and Patrick Franco subscribed for 20,000 shares each.
Following the admission, the company will have 330.1 million shares overall.
Earlier on Friday, the estate agent said it is impossible to predict Covid-19's impact on the remainder of 2020 at this point of time due to the uncertainty of the situation, but the company has taken several steps to cut costs including the closure of all branches from March 23, furloughing around 750 employees and cutting pay package of other employees and directors.
Foxtons additionally has deferred all February taxes, payable in March, by one month and is reducing all other discretionary spend.
At March-end, Foxtons had a cash balance of GBP21.9 million, including the fully drawn revolving credit facility of GBP5.0 million. However, GBP7.0 million of this cash represents creditor payments that now are subject to discussions over payment terms and discounts, the company said.
By Tapan Panchal; [email protected]. Updated by Evelina Grecenko; [email protected]
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