Coronavirus: The Gym Group and Hollywood Bowl latest to tap investors for cash
UK businesses are racing to raise equity and shore up their finances during the coronavirus crisis, with The Gym Group and Hollywood Bowl among the latest firms to tap investors for cash.
According to research by Peel Hunt, there have been 32 equity raises of at least £5m in the UK since the middle of March as firms scrambled to strengthen their finances.
Retail, leisure and hospitality firms have been among those seeking extra cash.
The sector has been severely affected by the coronavirus lockdown restrictions, with most businesses forced to close.
The Gym Group secured £41.3m in new funding after completing a share placing this morning.
The company said it now has “sufficient liquidity to weather the board’s most pessimistic trading scenario”.
Meanwhile Hollywood Bowl raised £10.9m through an equity raise today.
Chief executive Stephen Burns said: “The funds raised today will further strengthen our balance sheet which we believe will enable us to emerge from this period of significant disruption in a robust financial position”.
There are concerns that the spike in requests for capital during the coronavirus crisis could cause investors to become more selective.
“We expect significantly more to be raised over the next couple of months,” Peel Hunt said.
“The key question is whether there is enough cash in the market to support all the requests for capital. We suspect not and that investors will become increasingly selective.”
Publishing group Bloomsbury also announced a share placing today, raising £8.4m, and Foxtons announced a £22m equity raise.
Last week, six companies raised new equity of nearly £1.2bn taking the total raised to £2.7bn, with an average 22 per cent new equity being issued, Peel Hunt said.
Asos, The Restaurant Group, WH Smith, City Pub Group have already completed placings in recent weeks.