City Pub Group looks to raise £22m: City Pub Group is looking to raise £22m by way of a Placing to raise £15m and an open offer at 50p a share to raise £7m. The company stated: “The company has taken a number of steps to significantly reduce its monthly costs including temporary and permanent reductions in the number of employees, unpaid leave and salary sacrifice of staff, reduction in the salary of directors by 50% until the pubs re-open and halting training and recruitment costs. Certain variable costs have been suspended e.g. BT, Sky and other entertainment and promotional activities. The company will also be pursuing the government’s announced support of reimbursement of 80% of employees costs for those on salaries of £30,000 pa or less, is in discussions with Landlords with a view to achieving rent holidays and reduce other commitments, is in discussions with suppliers regarding extending credit terms and is also intending to submit claims under relevant insurance policies for both covid-19 and for its pubs being closed down. The company will also benefit from a business rates holiday in line with government announcements. The company intends to retain key head office staff and pub managers in order to protect the business. Whilst headcount will be reduced in the near term, it is important that the company maintains a nucleus of experienced staff who directors’ believe will help the business to hit the ground running when normal trading conditions return. The directors also intend to implement new sales and marketing technology platforms in order to further centralize marketing and sales activities and streamline operations. As announced on 17 March the board is confident the company has sufficient working capital to maintain its operations for at least another six months without further capital. The directors estimate that the monthly cash requirement, including retained employee costs and no deferral in rent, will be approximately £350,000 per month. Current net debt is approximately £32 million against a portfolio consisting of freehold assets (90%), with a net book value of £116 million as at 29 December 2019. The company has a strong and supportive relationship with its bank. Whilst its bank have waived key covenant tests until December 2020, its £35 million bank facility, repayable in 2022 is fully drawn and its £15 million accordion facility remains subject to credit committee approval. The company is therefore proposing to raise funds via a Placing to raise up to £15 million (before expenses) and up to a further approximately £7 million via the Open Offer in order to: strengthen the company’s balance sheet in the event that the ongoing suspended trading environment is extended; improve operational execution as a result of a more streamlined business; enable the company to plan ahead for when more normal levels of business return; and position the company, should the right opportunities arise, to expand the company’s portfolio of pubs at a time when the directors’ believe short-term acquisition prices will be reduced. The directors believe that if the Placing is successful, the company will be well placed to grow the business and recover shareholder value once its pubs reopen. The cost base will be reduced and, although the cost base will increase when the pubs reopen, the company will be well financed to enable the pub portfolio to be expanded at a time when the directors believe acquisition prices will be reduced.”

C&C Group issues 140 million euros of new notes: Drinks company C&C Group has announced the successful issue of the equivalent of approximately €140m in euro and sterling of new US Private Placement notes. The company stated: “The unsecured notes, which represent C&C’s debut issue in the USPP market, have maturities of ten and 12 years. The issue has achieved C&C’s aims of diversifying the sources of debt financing and extending their maturity out to 2032 on attractive terms. Covenants are aligned to those of the group’s existing debt facility.” Jonathan Solesbury, group chief financial officer, added: “We are very pleased to have successfully completed our first US Private Placement, particularly against the backdrop of the current market uncertainty. The issue extends the maturity of our debt as well as diversifying our capital structure. It gives the company access to a broader range of funding options in the future.” Lloyds Securities and NatWest Markets acted as joint placement agents on the Placement, Rothschild & Co acted as financial advisor to C&C.