Premier Inn owner Whitbread is to launch a £1bn rights issue to boost liquidity following the coronavirus pandemic and to protect it in case of a resurgence.
The company has been hit by mass closures of its hotels and restaurants during the pandemic.
In March, it warned it was at risk of default on covenants and negotiated waivers with lenders.
It is now targeting net proceeds of £980m through a rights issue to strengthen the balance sheet, enable it to pursue a committed pipeline and provide headroom in the event of a resurgence of Covid-19.
The company said in an update: “Given Whitbread’s high fixed and semi-variable costs, its balance sheet will be impacted by material cash outflows during the period when its hotels and restaurants are closed or operating at low occupancy levels as a result of UK government measures and/or social distancing.”
Whitbread had £300m of cash as of 15 May and access to a £950m revolving credit facility, with just £50m of this drawn down. It also has access the Bank of England’s Covid Corporate Financing facility with a limit of £600m.
To send feedback, e-mail emma.rosser@egi.co.uk or tweet @EmmaARosser or @estatesgazette
