UK pubs group Mitchells & Butlers to raise $486 million

© Reuters. FILE PHOTO: Customers are seen at a table outside The Island Queen pub in London

(Reuters) – UK pub operator Mitchells and Butlers (M&B) said on Monday it will raise 350 million pounds ($485.98 million) in new equity under a deal with creditors and its main investors that also includes 150 million pounds in new credit lines.

M&B, which cut around 1,300 roles last year, said in January it may need to raise fresh funds as Britain’s latest lockdown had shut its sites again.

The company also said Piedmont Inc, Elpida Group and Smoothfield Holding, which collectively own around 55% of the pub owner, had formed a consortium called Odyzean Ltd to become its majority shareholder.

Under the proposed open offer, M&B will issue about 167 million new ordinary shares to existing shareholders at a subscription price of 210 pence per share, representing a 36% discount to the stock’s closing price on Feb. 12.

“Without this major equity injection, the prospects for the business, its 1,600 venues, and over 40,000 UK employees would be bleak,” an Odyzean spokesperson said.

M&B also said it has agreed on amendments and waivers with creditor Ambac Assurance UK Ltd on certain potential breaches under its secured debt financing.

Odyzean said it will also take up excess shares not taken up by other shareholders to ensure that the open offer will be fully subscribed. It also intends to review the company’s board, which could reduce the number of non-executives.

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