Mitchells and Butlers has announced the launch of an open offer, following an announcement last week that the group intends to raise £350m from shareholders.
The board, which includes representatives of the Odyzean Group, a major shareholder of Mitchells and Butlers, said it believes that the open offer is “critical for the continued operation and financial stability of the group, for managing the business through the current pandemic and, ultimately, to deliver long-term, sustainable growth to Mitchells and Butlers’ shareholders”.
The group previously said that under a proposed open offer, it will issue approximately 167 million new ordinary shares, with a subscription price of 210 pence per share, representing a 36% discount to its closing share price on 12 February 2021.
Phil Urban, CEO of Mitchells and Butlers said: “M&B was a high performing business coming into the pandemic and with the support of our main stakeholders, including the equity injection from this Open Offer, we have every confidence that we can emerge in a strong competitive position once current restrictions are lifted.
“The hospitality industry has done everything that has been asked of it to date and, now that the vaccines are being rolled out and infections are dropping, we are hopeful that pubs and restaurants will soon be allowed to reopen safely so that we can start to serve our customers again”
In its latest operational update, the pub group noted that between 27 September 2020 and 16 January 2021, total managed sales were 69.8% below the prior year.
On a like-for-like basis (for sites when open, excluding periods of closure) trading was 30.1% down on the prior year during this period.
In addition, it had a cash balance of £113m as at 16 January 2021 with all facilities drawn, and since the start of the year, during which time its estate has been fully closed, cash burn was estimated to be between £30m and £35m per four-week period.
However, the group has recently reached an agreement with its relationship banks for a new £150m three year unsecured revolving credit facility.