Gym Group raises £41.3m in placing to weather Covid-19 closures

The Gym Group has raised gross proceeds of around £41.3m in a placing to help strengthen its balance sheet and provide liquidity while its gyms are closed due to the Covid-19 pandemic.

The company placed 27.4 million new ordinary shares at 150p each. This represents a 6.8% discount to the closing share price of 161p a day earlier.

Announcing the placing on Thursday, TGG said credit approval had been received for an amendment to its existing £70m committed bank facility, maturing October 2023, with its existing lenders HSBC, Natwest and Banco de Sabadell to provide commitments for an incremental £30m for an 18-month period.

Chief executive officer Richard Darwin said: "We are grateful for the support in these unprecedented times and are confident that the business now has sufficient liquidity to weather the board's most pessimistic trading scenario.

"We continue to believe in the long term attractive fundamentals of the low cost gym sector and our strengthened balance sheet will enable us to take advantage of growth opportunities that arise in the immediate aftermath of the crisis."

At 0845 BST, Gym Group shares were up 4.3% at 167.88p.