A placing that raised £21million for Revolution Bars Group left a sour taste in the mouth as shares dropped more than 28%.
The group, which operates Revolucion de Cuba and Revolution-branded bar and restaurants, said the cash raised would give it “firepower” as restrictions on trading continued to lift.
It said it would use the money to reduce debt and to “take advantage of opportunities that undoubtedly will arise from a very dislocated market”.
The group, which runs 66 outlets, said its net bank debt stood at £28.5million, which it said was “a level which will limit its ability to invest in the refurbishment and expansion of its estate”.
Part of the proceeds – £2.5 million – will be used to refurbish 15 bars over the next 18monts while another £7.5m will be set aside to “expand its estate, on a selective site-by-site basis, into new towns and regions”.
Rob Pitcher, chief executive of the bar group, said: “Thanks to the support of our shareholders and new investors, this successful fundraising will allow Revolution Bars to emerge from this period of disruption in a strong position with a fit for purpose balance sheet which provides us with ongoing financial flexibility and an excellent platform from which to deliver for all our shareholders.”
The company said it has been “delighted” with the performance of the 20 bars within the group that have reopened since restrictions on trading began to ease as they are “substantially exceeding expectations”. These were able to deliver almost half (48%) of sales in the four week after lockdown began to lift in April that it did the same period in 2019 – despite only being 15% capacity, the group said.
The issue price represented a discount of approximately 41.2% to the closing price on Monday.
Shares closed down 27% to 24p.
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