British pub group Mitchells & Butlers' sales hit by COVID-19 closures

FILE PHOTO: Customers are seen at a table outside The Island Queen pub in London
·1 min read

(Reuters) - Mitchells & Butlers on Monday launched an open share offer to raise 351 million pounds ($491.47 million) in additional capital, as it reported a plunge in sales due to the closure of pubs and restaurants in Britain's latest lockdown.

The Harvester, Toby Carvery and All Bar One owner said total managed sales between Sept. 27 and Jan. 16 slumped 69.8% on-year.

M&B initially announced the plan to raise 350 million pounds in fresh equity from investors last week as it seeks to ride out the COVID-19 pandemic.

The crisis-hit company on Monday proposed to offer 7 new shares for every 18 existing shares to qualifying shareholders, at a price of 210 pence per share.

The British pub operator, whose German businesses were closed last November, said its cash burn is estimated to be between 30 million pounds and 35 million pounds for four weeks since the start of the year during closures.

"The hospitality industry has done everything that has been asked of it to date and, now that the vaccines are being rolled out and infections are dropping, we are hopeful that pubs and restaurants will soon be allowed to reopen safely," Chief Executive Officer Phil Urban said.

The company has also agreed with the trustee of its pension funds to delay monthly contributions from January until March 2021.

($1 = 0.7142 pounds)

(Reporting by Tanishaa Nadkar in Bengaluru; Editing by Uttaresh.V and Sherry Jacob-Phillips)