Loungers PLC (LON:LGRS) has raised around £8.3mln in a premium share placing to protect its business during the coronavirus pandemic.
The bars group said it has raised the funds through the placing of 9.25mln new shares at a price of 90p each, a 16% premium to its closing price on Wednesday.
In a separate announcement unveiling the placing on Wednesday evening, Loungers said the funds raised will be used to “provide sufficient liquidity in the event that [coronavirus] materially impacts the company's sales into 2021”, as well as to allow it to continue opening new sites once the pandemic came to an end.
Combined with its existing cash and loan facilities, the company said it will have funds of around £31mln, which it estimated was enough to maintain the business for around 46 weeks of closure.
In a note on Thursday, analysts at the company’s house broker Peel Hunt retained their ‘buy’ rating and 200p price target on the stock, saying they believed Loungers “ should emerge from the [coronavirus] crisis in a position to resume its leadership…of the licensed retail sector”.
The company’s shares jumped 25.2% to 97p in late-morning trading on Thursday.