Mitchells & Butlers raises £350m to maintain competitive position

The Toby Cavery and All Bar One operator raised the funds to the tune of £350.51m through an open offer that will see it issue 167 million new shares.

The raise sees shareholder groupings Piedmont, Elpida Group  and Smoothfield Holding being acquired under the Odyzean Group, which will hold 55% of the company’s issued share capital.

Before launching the raise, M&B said its liquidity position had “deteriorated significantly” as a result of the impact of the Covid-19 pandemic, with the open offer critical for the continued operation of the group and its immediate financial stability.

The capital provides the company with the capital to reduce its unsecured debt and to support its secured debt financing through an injection of equity, allowing it to meet its fixed obligations, it says. It also enables the resumption of investment in the estate to maintain its competitive position, provide the financial stability and strength to emerge from the crisis, and allow previous momentum to be regained.

The company has already reached agreement with its banks for a new £150m three-year unsecured revolving credit facility, which was conditional on completion of the open offer.

Application has been made for the new shares to be admitted to the premium listing segment of the London Stock Exchange, which is expected to become effective from tomorrow (12 March).