The operator of 74 bars under the Revolution and Revolución de Cuba brands aims to raise £9mln from a firm placing of shares with institutional investors at 20p apiece.
A further placing of up to £6mln will be sought, but subject to clawback depending on the uptake of a simultaneous open offer.
“Prior to the onset of the COVID-19 pandemic, the group was demonstrating signs that the turnaround strategy put in place by the board was successful,” the company said, pointing to improvements in sales and profit reported in February’s half year results.
Over last year net bank debt had been cut to £8.4mln from £14.8mln but has since ballooned to £22mln as of 26 May, within a secured debt facility of £37.5mln.
With almost 99% of staff furloughed, the board taking 50% pay cuts and the UK government's current guidance is that pubs and bars will be closed until at least July 4, the group is assuming it will reopen its estate in August and generate sales in that month of approximately 55% of the previous level, increasing to around 80% by November as social distancing measures are relaxed.
It is expected that the fundraising proceeds will be received by the company following admission to AIM on July 27.