Revolution Bars is preparing to tap investors for £15m to slash debt and help it weather the coronavirus crisis while its venues are closed.
The chain, which was forced to close its 74 bars when the government imposed a coronavirus lockdown in March, said the proceeds will be used to “achieve an appropriate level of indebtedness”.
Revolution Bars had net debt of £22m on 26 May. The fundraise will also allow the firm to continue its turnaround plan after the coronavirus pandemic.
It will raise the funds through a firm placing and a placing and open offer at 20p per new ordinary share.
Revolution Bars also announced this morning that it will delist its shares from the London Stock Exchange’s main market to relist on AIM. The move will allow “quicker and cheaper fundraisings” going forward.
“The board believes the fundraising will enable the Group to achieve an appropriate level of indebtedness and emerge from the Covid-19 pandemic in a position of strength,” Revolution Bars said this morning.
The company said it had cut weekly expenditure to £400,000 while its bars are expected to remain closed until at least 4 July.
“The net proceeds of the fundraising will be used primarily to reduce the group’s financial gearing.”
It added: “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, with the group achieving growth in both like-for-like sales and adjusted Ebitda and making significant progress on debt reduction.”