Wetherspoons Raising $175 Million to Ride Out U.K. Pub Shutdown

(Bloomberg) --

JD Wetherspoon Plc raised about 141 million pounds ($175 million) by issuing new shares as the U.K. company eyes reopening pubs that have been locked down for the coronavirus.

The share placement, representing about 15% of the company’s equity, is aimed at seeing the bar owner through the pandemic crisis, it said in a statement. Pubs and restaurants have been closed since last month, with thousands of workers furloughed.

The stock rose as much as 9.1% early Thursday after the company placed 15.7 million shares at 900 pence each. It has fallen 40% so far this year, however.

Wetherspoon is starting to plan for reopening pubs “in or around June,” it said late Wednesday. The U.K. government has yet to detail plans for a restart of business.

The company said last month that it was delaying some projects to reduce expenditure and canceling the interim dividend. It said those actions, combined with the U.K. government’s proposals on property tax relief and credit guarantee facilities, meant that it had sufficient liquidity to maintain operations at a substantially lower level of sales.

Chairman Tim Martin had said that the closure of pubs wouldn’t save lives but cost thousands of jobs and create unsustainable costs for the U.K., and argued that Taiwan, Singapore and South Korea had kept most bars open during the coronavirus crisis.

The company said it won’t pay a final dividend as it seeks to preserve cash. It has fully drawn down its revolving credit line.

©2020 Bloomberg L.P.