HSS Hire Group PLC (LON:HSS) is proposing to raise £54mln via a placing at a steep discount and an open offer to strengthen its cash position.
Shares will be placed in the coming weeks at 10p each, a 58% discount to Friday’s closing price of 21.2p.
READ: HSS Hire to close half of outlets with loss of 300 jobs
The tool and equipment hire group said three of its major shareholders – representing 78% of its issued share capital – have already committed to subscribe £43.5mln as part of the raise.
Investors Toscafund Asset Management and Ravenscroft are contributing £18.6mln through the placing and have committed to subscribe for their pro-rata entitlement under the open offer.
Exponent Private Equity is also subscribing to the open offer, committing for £15mln worth of shares.
The proceeds will be used to continue investing in the company’s technology platform and the hire fleet to support the tool hire business, as well as turning its OneCall rehire proposition into a more scalable technology-led business and to make more customer-friendly.
HSS will also repay £15mln of debt due in January as part of a deleveraging programme.
Revenues have now returned to above 90% of 2019 levels, it said, and the firm has also seen a notable acceleration of its digital strategy, however HSS said it may breach covenants if COVID-19 disruption persists.
The supplier said it is exploring alternative markets for a listing.
Shares dropped 10% to 19p on Monday at the opening bell.