SSP plots £475m rights issue to patch up battered balance sheet
Upper Crust owner SSP today said that it would raise £475m through a rights issue to shore up its battered finances amid the ongoing pandemic.
The travel food provider announced the raise as part of a suite of measures to tackle problems on its ailing balance sheet, warning that revenue would not return to pre-pandemic levels until 2024.
Along with the raise, SSP said that it would extend of bank facilities that were due to mature in July 2022 to January 2024, and waivers of existing covenants.
The firm plunged to a £425m loss last year as railway passenger numbers plunged at one point to levels not seen since the Victorian era.
SSP had previously decided to slash 14,000 jobs as a result of the downturn.
The firm said that it burnt through £120m in cash over the four months to the end of January. It’s current total liquidity stands at £420m.
Commenting on today’s plans, chief executive Simon Smith said: “Over the past year the Group has experienced an unprecedented period of disruption in the travel sector.
“Early and extensive action has enabled us to protect the business and put ourselves in the best possible position to emerge strongly as the market recovers.
“Strengthening the balance sheet now will underpin the business if the recovery in the travel sector is slower than we anticipate and it gives us the capacity to invest in growth opportunities as we emerge from the pandemic. Our current expectation is that the early recovery will be led by domestic and leisure travel from which we are well-placed to benefit.”
Both domestic and international travel are due to return on 17 May if the UK’s roadmap out of lockdown proceeds as planned.
Shares in the firm dropped 2.5 per cent this morning.