Hollywood Bowl Group PLC (LON:BOWL) is looking to raise £10.9mln from a placing to strengthen its balance sheet and ensure it is “well placed to act” on opportunities after the lifting of coronavirus lockdown restrictions.
Monthly cash burn is expected to be £1.6mln while its 10-pin centres remain closed due to the lockdown.
The placing will see 7.5mln new shares issued at a price of 145p apiece, beginning on Friday morning, a premium to the previous day's closing price of 143p but less than half the price seen in January and February.
Having already announced various cost cutting measures and participation in government coronavirus support schemes, as well as the scrapping of its interim dividend payment, the company said it “expects to maintain a positive cash balance until the end of October”.
The group said it has committed to spend £1.7mln on new centre openings within two months of the lifting of coronavirus lockdown restrictions.
As at 31 March, will all rents and salaries paid for that month, there was roughly £15.6mln of cash in the bank and £30.25mln of debt drawn from its £35mln borrowing facility, with an additional £10mln agreed earlier this month and lending covenants waived.
As of 8 April, the group said it had £11mln undrawn under its bank facility.
Hollywood Bowl shares surged 12% higher to 159.97p in the first hour of trading on Friday morning.