Manchester-based On the Beach PLC, is planning to place 19.9% of its existing share capital in order to cope with the downturn in international travel.
In a statement, the directors said that the placing, worth around £70m, along with revised banking facilities, would enable On The Beach to emerge in a strong position as it aims to become Europe’s leading online retailer of beach holidays.
“The fundraising and banking facilities announced today will provide On the Beach with greater flexibility and firepower to ensure the Group is ready to take advantage of the multiple opportunities that are likely to arise across the travel industry, as and when the world emerges from the ongoing crisis,” said Simon Cooper, Chief Executive of On the Beach Group plc.
“Importantly, the additional funding will enable the Group to consider commercial opportunities simultaneously with a strong balance sheet to support its growth ambitions. The funding will also enable the Group to increase its online and offline marketing spend to meet pent up consumer demand when it returns, so as to make substantial market share gains and deliver long term growth for shareholders.”
Company directors and some of its executive management team will participate in the placing, contributing approximately £1.08m.
The company has put aside an exceptional charge of £35m for cancelled holidays.
Its first half results are scheduled for release at the end of June.