Revolution Bars Group has raised £21m after announcing plans to tap up shareholders for new funds.

The cash aims to ensure the group is well-positioned to grow once its bars fully reopen, reduce indebtedness, accelerate its refurbishment programme and take advantage of favourable market conditions for estate expansion.

The 66-strong bar operator raised the money by way of a firm placing and a placing and open offer at 20 pence per new ordinary share.

The new ordinary shares will represent approximately 45.6% of the enlarged share capital of the company, while the open offer shares will represent 2.17%

Company directors agreed to buy new ordinary shares, including chairman Keith Edelman (200,000), CEO Rob Pitcher (375,000), CFO Danielle Davies (75,000) and non-executive director William Tuffy (37,500)

Rob Pitcher, CEO, commented: “Thanks to the support of our shareholders and new investors, this successful fundraising will allow Revolution Bars to emerge from this period of disruption in a strong position with a fit for purpose balance sheet which provides us with ongoing financial flexibility and an excellent platform from which to deliver for all our shareholders.

“We now have the firepower to deliver strong proven returns from the refurbishment of the remainder of our uninvested bars and the ability to take advantage of opportunities that undoubtedly will arise from a very dislocated market.

“We have traded outstandingly since the initial restrictions have been lifted. We are now looking forward to the end of all restrictions and are excited about the next part of the journey delivering best in class entertainment and hospitality to our guests.”

Despite demonstrating signs its turnaround strategy was successful pre-Covid, the pandemic has resulted in a “significant increase” in indebtedness.

Net bank debt stood at £28.5m as of 10 May 2021, which limits the group’s ability to invest in the refurbishment and expansion.

Of the new funds, £11m will strengthen the group’s balance sheet and fund the costs of the fundraising.

Meanwhile £2.5m will go towards its estate refurbishment programme, enabling the refurbishment of an additional 15 bars over the next 18 months, targeting a return on investment from such refurbishments of 50%+.

Finally £7.5m will be used to take advantage of favourable market conditions to expand its estate, on a selective site-by-site basis, into new towns and regions. The board will target a return on investment from eight new sites of 25%+.

In addition, directors believe that there may also be opportunistic M&A prospects when Government support and the rent moratorium ends over the summer months.

NatWest has agreed to allow the group to retain an additional £3m of headroom with its facilities as the sector moves into a more regular trading environment.