SSP Group has announced that it intends to raise approximately £475m by way of a ’12 for 25’ rights issue, as it looks to firm up its financial position.

Last month SSP confirmed that it had drawn down £300m from the Bank of England CCFF (Covid Corporate Financing Facility) and was exploring further funding options. The rights issue would, in part, be used to pay this back in February 2022.

At the time the travel hub operator said it was strongly placed to capitalise on the recovery of the travel sector, and was in a strong liquidity position, with cash and undrawn available facilities of around £520m, as at 30 September 2020.

The group has also extended its bank facilities, which were previously due to mature in July 2022, to January 2024, and secured waivers and modifications to existing covenants.

SSP said these combined measures would significantly strengthen its financial position and resilience and would position the group for the next phase of the pandemic.

“These measures will protect the business if the global travel sector experiences a more prolonged recovery from the pandemic, whilst under SSP’s base case scenario, they will strengthen the group’s balance sheet and provide increased capacity for investment as the travel market recovers,” it said.

SSP said it had taken “rapid and decisive” action to protect its people and the business, since the being of the pandemic, however the group continues to see cash outflows as a result of very low activity in the travel market.

The group’s current monthly cash burn rate is approximately £25-30m, and it is expected to remain in this range during the second quarter, which ends 31 March 2021.

Simon Smith, CEO of SSP, said: “Strengthening the balance sheet now will underpin the business if the recovery in the travel sector is slower than we anticipate and it gives us the capacity to invest in growth opportunities as we emerge from the pandemic. Our current expectation is that the early recovery will be led by domestic and leisure travel from which we are well-placed to benefit.

“Looking further ahead, the actions we’re taking will allow us to capitalise on the recovery as well as future new business opportunities, enabling us to deliver long term sustainable growth for the benefit of all our stakeholders.”

As of 31 January 2021, the group had available liquidity of approximately £420m. For the six-month period to 31 March 2021, revenues are expected to be down approximately 80% relative to the equivalent period in 2019, it said.