Management

Rank Group considers equity raise to shore up balance sheet

2 minutes read
Mecca Bingo operator Rank Group is in discussions with advisers over a potential equity issuance that could provide almost £70m in new funding for the business.

In a statement issued by general counsel Luisa Wright, the operator said its board was continuously reviewing its financial position, and a share placement was being talked over. 

London Stock Exchange rules allow businesses to raise up to 19.9% of their market capitalisation, which based on Rank’s £337.16m valuation, could see the business raise up to £67.1m.

“Such an equity issuance would be intended to strengthen Rank’s balance sheet in this unprecedented trading environment,” Rank’s statement explained. “There can be no certainty that the equity issuance will proceed.”

A further update would be provided if appropriate, Rank added.

It comes as the business’ British brick and mortar casinos and bingo halls have once again been forced to close their doors as a result of novel coronavirus (Covid-19), with a new national lockdown beginning today (5 November). 

The first lockdown, from 23 March, saw bingo halls remain shuttered until 4 July, while casinos were not able to resume operations until 15 August, two weeks later than originally planned.

In September Rank reported an 8.2% decline in revenue for the year ended 30 June, with a 22.6% rise in digital revenue helping offset land-based declines resulting from lockdowns in its core markets of Spain, Belgium and Great Britain.

It has since withdrawn from the Belgian market, after selling its remaining property in the country, Casino Blankenberge, to Kindred Group in a £25m deal, announced last week.

Should Rank proceed with the share sale, it would become the latest British operator to shore up its finances. Flutter Entertainment raised £812.6m by selling 8,045,995 new ordinary shares, at a price of €112.42 each in May, while William Hill completed a £224.0m placement in June.   

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