M&B seeks to raise £350m as staff pension payments suspended

Following the announcement made by pub giant Mitchells & Butlers (M&B) on 7 January 2021, regarding its intention to explore an equity capital raise, the Board now intends to raise £350m through an open offer.

In an open offer, a shareholder is allowed to purchase stock at a price that is lower than the current market price.

The company has suspended payments to its staff pension fund ahead of this emergency fundraising plan. Monthly pension contributions of around £4m per month have stopped for three months.

Mitchells & Butlers has also reached agreement with its relationship banks for a new £150m three-year credit facility. The facility under the refinancing is conditional on completion of the open offer.

Chairman of Mitchells & Butlers, Bob Ivell commented, “We are pleased to have received the support of our major shareholders and key creditors.

'Mitchells & Butlers was a high performing business going into the pandemic and this capital raising and refinancing will provide the business with the certainty of funding that it needs in order to emerge in a stronger position to take advantage of its strong property portfolio, well known brands and operational expertise in order to win market shareand continue its long-term strategy of deleveraging and driving value creation for shareholders.”