Gym Group To Raise Funds Through Share Placing, Subscription

(Alliance News) - Gym Group PLC on Thursday said it intends to issue up to 19.9% of its current ...

Alliance News 17 April, 2020 | 6:04AM
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(Alliance News) - Gym Group PLC on Thursday said it intends to issue up to 19.9% of its current issued share capital to raise funds.

The stock closed 1.3% higher at 161.00 pence each on Thursday in London.

The gym operator said the placing will be carried out through an accelerated bookbuild with Numis Securities Ltd and Peel Hunt LLP acting as joint bookrunners.

Gym Group said its directors and some members of the executive management team have agreed to subscribe for shares at the placing price to contribute around GBP175,000.

Funds realised will be used to strengthen the company's balance sheet and provide liquidity while all its 179 sites are closed as part of efforts to combat the spread of Covid-19. As at the end of March, the company had cash of GBP22.4 million.

Separately, Gym Group said it has received credit approval for an amendment to its GBP70 million bank facility maturing October 2023, with its existing lenders - HSBC Bank PLC, Natwest and Banco de Sabadell - to provide an additional GBP30 million for 18 months.

In efforts to conserve cash, salaries of executive directors have have been temporarily reduced and 50% of bonus awards for 2019 have been deferred. All non-executive board members have agreed to waive their board fees for the second quarter of 2020, and the company is taking advantage of available support offered by the UK government including rates relief, the coronavirus job retention scheme for furloughed workers, and the deferral of some payments due to HMRC.

"The board is confident that the steps being taken will ensure sufficient liquidity even in the event of its most pessimistic trading scenario which assumes a total closure of the estate for the remainder of 2020 and a significantly reduced membership upon reopening," Gym Group said.

"The board also believes that the strengthened balance sheet will provide the company with the ability to take advantage of growth opportunities in the immediate aftermath of the Covid-19 crisis both in terms of membership acquisition and by restarting its site roll out programme."

By Ife Taiwo; ifetaiwo@alliancenews.com

Copyright 2020 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article

Security Name Price Change (%) Morningstar
Rating
Gym Group (The) PLC 163.20 GBX 10.42 -

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