TRG announces £175m capital raise

The Restaurant Group (TRG) has announced a proposed capital raise of £175m, by way of a firm placing, and placing and open offer.

The group said it had considered a number of different scenarios for future trading and the board believed that a capital raising was in the best interests of TRG and its shareholders.

Net proceeds will be used to improve TRG’s liquidity headroom, in order to protect against any resurgence of Covid-19, and to accelerate TRG’s deleveraging to a target net debt to EBITDA (pre-IFRS 16) below 1.5x, in the medium term.

In addition the raise will strengthen TRG’s flexibility to capitalise on selective site expansion in its Wagamama and Pubs businesses, where it expects there to be “good and profitable opportunities”, it said.

The capital raise will take place by way of a firm placing of 95,299,430 new ordinary shares; and a placing and open offer of 79,700,570 new ordinary shares. It will be set at an offer price of 100 pence per share.

At the beginning of March the group announced that it had signed commitments in relation to £500m of new debt facilities, which comprise a £380m term loan facility and a £120m super senior revolving credit facility.

The new facilities provide the group with enhanced liquidity and refinancing. They will, as required, be used to pay and refinance in full all of TRG’s existing debt facilities, which are due to reach maturity by July 2022.

Over the past year the group has restructured the business, exiting sites that were deemed structurally unattractive and undertook a CVA. The business now operates around 400 sites – down approximately 250 from the end of 2019.