Wetherspoon has announced plans for an equity placing to raise proceeds of up to £93.7m.

The pub company said the placing of new ordinary shares of £0.02 each represented up to 6.95% of the company’s existing issued share capital.

The placing is expected to raise gross proceeds between £92.1m and £93.7m and is not being underwritten.

The net proceeds will be used to strengthen the company’s balance sheet, working capital and liquidity position during the period of disruption.

The additional capital is aimed at providing sufficient liquidity to deal with low sales after reopening, helping the company to return to growth as the market normalises.

In addition, JDW said the capital will facilitate the acquisition of new properties, which are likely to be available at favourable prices, as a result of the pandemic.

The company is considering the acquisition of a number of properties in central London, the freehold reversions of pubs of which it is currently the tenant, and properties adjacent to successful pubs.

Wetherspoon said it may be possible to achieve a higher-than-average return on capital on properties acquired in the next few years, based on the company’s past experience.

The board has concluded that the equity placing is in the best interests of shareholders; a conclusion endorsed in the course of recent shareholder consultation.

The placing structure minimises cost and time to completion at an important time for the company.

Chairman Tim Martin said: “The Covid‐19 outbreak is having a severe impact on the UK pub sector. After a number of false starts, the hospitality industry generally anticipates a return to more normal trading patterns in the spring and summer, as a result of the introduction of a mass vaccination programme. The equity placing announced today will help the company, along with the other actions it has taken, to emerge from the pandemic in a strong position.

“Very many thanks to everyone at the company, and also to its shareholders, suppliers, landlords and banks, for their support and commitment.”