May 21, 2020

City Bulletin: Premier Inn owner Whitbread launches £1bn rights issue

Whitbread, the company behind Premier Inn hotels, has launched a £1bn rights issue to repair its balance sheet after coronavirus shut its hotels. While the cash call will bring in less than the £2bn capital raise launched by caterer Compass earlier this week, it represents a far bigger chunk of Whitbread's equity and is one of only a handful of rights issues - as opposed to non-preemptive placings for smaller sums - to be launched since the pandemic started. Whitbread will issue one new share for every two existing shares. The extra cash will also allow it to invest at a time when Whitbread said the decline of the independent hotel sector - hit even harder by the shutdown - could accelerate the shift to budget branded hotels. The Canada-based company on Wednesday unveiled more services for retailers, including options for small shops to set local delivery areas and compute optimal delivery routes, and finance functions to help them manage cash flow.

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