Nightcap PLC (AIM:NGHT), the owner of bar brands such as Barrio and the Cocktail Club, saw its shares rise close to 17% on Wednesday after it revealed plans to raise an extra £3.5 million.
Some 70 million new shares will be issued to support the equity raise and will be sold at 5p each, with £750,000 already generated through a firm subscription for 15 million shares.
Cash raised will be used to help the group continue with its merger and acquisition plans, strengthen its balance sheet and maintain day-to-day operations.
Should all the newly issued shares be purchased they will represent close to a 23% stake of the entire group.
At 5p each, the share sale represents a 30% premium to Tuesday’s closing price of 3.85p.
Shares are trading at around 4.5p on Wednesday, having jumped as high as 5p in early trading.
Fundraising activities are expected to continue through the following weeks, with management revealing it has received new investor interest in addition to the share sale.
Plans for the issuing of new shares will have to be approved by shareholders at the company’s next annual general meeting.
Sarah Willingham, CEO of Nightcap, said: "We believe that a once-in-a-generation opportunity currently exists in the late-night bar sector to create a substantial market-leading group of the most popular and much loved late-night bar concepts.”