Pub owner Mitchells & Butlers has announced plans to raise £350m from investors in moves to shore up its finances as pubs and bars remain closed across the UK.
The owners and operator of brands including All Bar One, Toby Carvery and Harvester, said it will issue about 167 million new ordinary shares with a subscription price of 210p per share – a 36% discount on the company’s closing share price last Friday, February 12.
The group, which also owns Vintage Inns, Browns and Miller and Carter amongst others, revealed a consortium of three of its largest investors has said it will be able to make the whole £350m available.
Piedmont, Elpida Group and Smoothfield have joined forces to create a new holding company, Odyzean, holding 55% of the company.
The firms said the new company will help address “the significant capital needs of Mitchells & Butlers”.
Odyzean said it is fully supportive of the current management team but that it plans to review the current composition of the board of directors.
A spokesperson for Odyzean said: “We are determined to support Mitchells & Butlers through the current difficult environment.
“As a result of the pandemic, Mitchells & Butlers has been forced to close all its venues, with significant negative implications for its cash flows and balance sheet. Without this major equity injection, the prospects for the business, its 1,600 venues, and over 40,000 UK employees would be bleak.
“Our significant financial commitment will help to secure the future of the business and provide a platform for the strong management team to restore the Company’s operations to good health when circumstances allow.”
Mitchells & Butlers also told investors that it has secured an agreement with banks for a new £150m credit facility as part of the financial shake-up.
Last month, the pub owner said it had only £125m in cash reserves and was burning through between £35m and £40m each month while sites remain shut.
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Chairman Bob Ivell said: “We are pleased to have received the support of our major shareholders and key creditors.
“Mitchells & Butlers was a high-performing business going into the pandemic and this capital raising and refinancing will provide the business with the certainty of funding that it needs in order to emerge in a stronger position to take advantage of its strong property portfolio, well known brands and operational expertise in order to win market share and continue its long-term strategy of deleveraging and driving value creation for shareholders.”