WH Smith taps investors for £150 million to get through coronavirus crisis
WH Smith today closed in on nearly £300 million of fresh funding as it attempts to limit the impact of the coronavirus, which has forced it to shut stores.
The company said it had secured £120 million of new lending, but that is conditional on a placing of 13.7% of its shares, worth around £150 million based on Friday’s closing share price, which is being prepared.
The newsagent to books chain has been forced to shut around 240 UK stores including many in its faster growing train station and airport sites. It is still trading from 140 hospital stores – selling extra food – and 200 shops which host Post Office sites.
The company said: “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.”
Analysts at Peel Hunt said the WH Smith’s debts had stood around £180 million and “investors can look forward and not over their shoulders at the debt position”. The stock – seen has a reliable earner by investors in recent years - initially rallied 10% before settling, up 1p at 1011p.
