Lookers turns to market with £80m fundraising
NORTH west car dealership group Lookers today unveiled an £80m fund-raising to shore-up its balance sheet.
The Manchester company, which renegotiated its banking facilities on June 1, said then it was still looking to raise capital by alternative means, because bank lending had become so expensive.
Lookers said the fundraising would strengthen its financial position as a result of reduced borrowings and provide flexibility from which to pursue future opportunities.
It also revealed that long-serving chief executive Ken Surgenor would retire in October. to be replaced by the head of the motor division, Peter Jones.
The fundraising is structured as a 5-for-6 placing and open offer to raise £60.6m and a firm placing to raise £20.2m, both at 40p per new share.
Chairman Phil White, said: “Lookers has established a solid basis for protecting profitability in the current difficult trading environment and is trading relatively resiliently. “
“The group’s balance sheet will be strengthened significantly as a result of the firm placing and placing and open offer. The improved capital structure will provide significant flexibility to enable the group to pursue its development strategy and capitalise on opportunities as the market recovers.”
The net proceeds of £77m will be used to pay down debt and assist in securing more favourable terms on the company’s banking facilities.
Lookers will repay a £50m high interest loan, reduce a term loan by £15m and reduce a revolving credit facility by £11.5m (which will remain available for further withdrawals).
It will also benefit from amended banking facility terms, which will reduce interest charges and fees, remove certain “onerous banking obligations” and
improve flexibility.
The Manchester office of Rothschild is acting as financial adviser and joint sponsor to Lookers with respect to the fundraising. Numis is acting as lead underwriter, joint broker, joint sponsor and sole bookrunner.
