WH Smith to tap investors for up to £150m due to coronavirus outbreak
WH Smith has confirmed it is planning to tap investors for a cash injection of up to £150m to shore up its balance sheet due to the impact of coronavirus.
The company said this morning that it has secured new lending facilities of £120m to strengthen its balance sheet, working capital and liquidity position, however the arrangement is conditional on raising new equity.
WH Smith said it is in “an advanced stage of preparation for an equity issue” of a maximum of 13.7 per cent of its issued share capital by way of a placing.
“These financing arrangements, coupled with a broad range of mitigating actions to manage the cost base and cash flow, will provide sufficient liquidity to deal with this most challenging of trading environments,” the retailer said.
The books and stationary chain was forced to close its travel business as passenger numbers at airports and train stations plummeted amid the coronavirus outbreak, while the majority of its high street stores have also closed.
The newsagent chain previously said it expects profit to be down between £30m to £40m in the financial year ending 31 August against previous expectations due to the outbreak.
However that was before lockdown measures were introduced across the UK. The retailer has been allowed to keep some branches open as essential stores, but the majority of its sites have been closed following the government order.
The company has kept 204 high street stores that contain a Post Office open, while its sites at NHS hospitals also remain open.