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Wagamama Owner Sets Out Plans To Raise £175m

Published on Mar 11 2021 1:17 PM in Restaurant tagged: Restaurant Group / Wagamama

Wagamama Owner Sets Out Plans To Raise £175m

Wagamama owner Restaurant Group has set out plans to raise £175 million.

The pandemic-battered firm, which has permanently shut 250 restaurants and cut approximately 3,000 jobs, expects sales to recover quickly boosted by reduced sector capacity and pent-up demand for dining out.

"This year will be a transitional one, although soft signs point to significant pent-up demand which could support a strong recovery through summer/autumn," Stifel analysts said.

While all of its sites are shut for dine-in, the company said that delivery and takeaway sales at Wagamama more than doubled from pre-pandemic levels for the four weeks ended February 28 and were up five times for its leisure sites.

"The capital raise announced today, alongside the debt re-financing announced last week, represents the last important step in our re-structuring process," CEO Andy Hornby said.

The company, which had last year raised approximately £57 million to weather the crisis, said that it will raise fresh funds by issuing 95.9 million new shares to investors.

It will also issue 79.7 million new shares to existing shareholders by offering them five new shares for every 37 existing shares.

Both will be offered at a price of 100 pence per share - a 9.3% discount to the stock's last closing price.

"The £175 million fund raise makes sense to lower leverage and take advantage of any distressed acquisitions," Jefferies analysts said.

Adjusted Pre-Tax Loss

The company posted an adjusted pre-tax loss of 87.5 million pounds for the year ended December 27, 2020, compared with 47.9 million pounds a year earlier and said its near-term outlook remained uncertain due to restrictions.

News by Reuters, edited by Hospitality Ireland. Click subscribe to sign up for the Hospitality Ireland print edition.

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