Bars group raises £21m to cut debts and drive post-lockdown expansion
Register for free to receive latest news stories direct to your inboxRegister
Manchester-based Revolution Bars has raised £21m by way of a firm placing and a placing and open offer at 20p per new ordinary share.
The proceeds will be used to reduce the group’s debts, accelerate its existing site refurbishment programme and to take advantage of favourable market conditions for estate expansion.
£20m was raised through the firm placing of 100,000,000 new ordinary shares at the issue price of 20p per share, and a further £1m was raised through the placing of 5,001,866 new ordinary shares at the issue price to qualifying shareholders.
The issue price represents a discount of approximately 41.2% to the closing price of an ordinary share on May 24, 2021.
FinnCap and Peel Hunt acted as joint brokers.
The group said prior to the onset of the COVID-19 pandemic it was demonstrating signs that the turnaround strategy put in place by the board was successful, with the group achieving growth in both like-for-like sales and adjusted EBITDA and making significant progress on debt reduction.
However, the COVID-19 pandemic has resulted in a significant increase in the group’s indebtedness, notwithstanding the measures taken by management to reduce costs and cash burn during a period of significant disruption to the business, including several extensive periods of estate closure during Government-enforced lockdowns, and the support provided by shareholders via the equity fundraising completed in July 2020.
The group’s net bank debt stood at £28.50m as at May 10, 2021, which the board considers is at a level which will limit its ability to invest in the refurbishment and expansion of its estate.
Therefore, the board decided to undertake the fundraising to reduce the group’s level of indebtedness, accelerate its existing site refurbishment programme and to take advantage of favourable market conditions for estate expansion.
Chief executive, Rob Pitcher, said: “Thanks to the support of our shareholders and new investors, this successful fundraising will allow Revolution Bars to emerge from this period of disruption in a strong position with a fit for purpose balance sheet which provides us with ongoing financial flexibility and an excellent platform from which to deliver for all our shareholders.
“We now have the firepower to deliver strong proven returns from the refurbishment of the remainder of our uninvested bars and the ability to take advantage of opportunities that, undoubtedly, will arise from a very dislocated market.
“We have traded outstandingly since the initial restrictions have been lifted. We are now looking forward to the end of all restrictions and are excited about the next part of the journey, delivering best in class entertainment and hospitality to our guests.”