(Updates to reflect increased size of placement)
March 20 (Reuters) - British chocolatier Hotel Chocolat
said on Friday it had agreed to issue new shares to
inject 22 million pounds into the business, as it faces having
to close its cafe and store locations due to Britain's spreading
coronavirus outbreak.
While companies have drawn down cash from existing financing
arrangements as the extent of the coronavirus crisis became
clear in the past fortnight, few have secured fresh investment
as banks and investors await more stable market conditions
before making decisions on risk and pricing.
The luxury chocolate maker, retailer and wholesaler
increased the cash call from 20 million pounds, however, after
strong demand from existing shareholders and other institutional
investors.
It has placed just under 9.8 million new shares at a price
of 225 pence per share, a discount from Thursday's close of 232
pence.
Co-founders Angus Thirlwell and Peter Harris will each buy
roughly 18% of the new shares, the statement said, while
non-executive chairman Andrew Gerrie will take about 9%.
Hotel Chocolat said the year had started off well with a 6%
rise in revenue last month, but that it now expects to close
stores while customers isolate themselves at home.
"The Company's trading in March-to-date has inevitably
slowed as the outbreak of COVID-19 has impacted footfall both in
the UK and internationally," the UK-listed company said, adding
that group retail revenue had decreased 5% year-on-year so far
in March.
UK Mother's Day on March 22 and the Easter holiday, when
Britons spend heavily on chocolate Easter eggs, typically make
up around 12% of the company's overall annual revenue.
British high Street retailer Laura Ashley announced
plans to call in administrators this week due to the outbreak's
impact on its performance and its inability to secure more
backing.
(Reporting by Muvija M in Bengaluru; editing by Patrick Graham,
Kirsten Donovan)
