Premier Inn owner Whitbread has revealed plans to raise £1 billion through a rights issue in moves to emerge from the Covid-19 crisis in a strong position.
Whitbread made the announcement as the vast majority of its hotels and all its restaurants remain shut in the face of coronavirus.
The company said it has furloughed around 27,000 staff on full pay during the crisis.
It said its UK hotels are “ready to open when the Government advises” but said its internal plans assume that hotels will be closed, or run at low occupancy, until September.
Whitbread chief executive Alison Brittain said: “Whitbread delivered a resilient financial performance in full-year 2020 in line with expectations, against a backdrop of low UK business and consumer confidence which particularly impacted the regional hotel market.
“However, the period after the year-end has been dominated by the impact of the rapidly evolving Covid-19 pandemic.
“In response, the business took rapid and decisive action to protect our teams and our guests, and to secure our business to ensure that we will be in the best possible position to rebound strongly.”
Announcing the rights issue alongside its preliminary results, the group said the investment is expected to help it unlock its long-term structural growth opportunities in the UK and Germany, where the group has long-term network potential for more than 110,000 and 60,000 rooms, respectively, and to win market share, including from the significant but declining independent hotel sector, whose market position may be weakened as a result of the COVID-19 pandemic.
Mrs Brittain said Whitbread has a “significant opportunity” to continue to build out its pipeline in the UK, boosting its large network of hotels by investing in upgraded formats such as Premier Plus rooms, which are proving popular with business and leisure guests.
She added: “Whitbread is a strong and much-loved business that has successfully navigated numerous turbulent periods during its proud 278-year history.
“The combination of the strengths of our people, business model and our brands, alongside a strong balance sheet and the decisive action that we have taken, means that when the covid-19 situation passes, we will be in a position of strength to continue to increase market share, support our colleagues and guests and create further significant value for shareholders.”