Rank Group banks £70m through share fundraise

Rank Group has raised £70m in new capital following the issuance of almost 77 million new shares in the UK casino business. A total of 76,736,762 shares were sold to institutional investors by Peel Hunt and Goodbody Stockbrokers UC at a price of 90p per share. A second offering of 1,009,258 shares were placed with retail investors at the same offer price, with the total shares offered representing 20% of the group’s total share capital. Several Rank Group directors participated in the purchase, acquiring more than 300,000 shares in the London-listed business.

Malaysian bank Hong Leong, which Rank has described as a “substantial shareholder” in the business, has agreed to purchase 43,650,693 of the total placing shares, representing more than half of the total shares issued (56%) and at a total subscription cost of £39.3m. “The proceeds of the fundraise will strengthen the company’s balance sheet, in order to maintain appropriate liquidity covenant headroom on its debt facilities under various trading scenarios, provide ample working capital to operate through this challenging trading environment and enable the company to continue to deliver on its transformation 2.0 programme,” Rank Group said in a statement. The £70m influx, added to the £25m generated from the sale of Rank’s remaining Belgian casino to Kindred Group in October, provides the company with a significant funding boost. The business has been severely affected by the UK government’s Covid-19 measures, having temporarily closed 82 of its Mecca Bingo clubs and 52 Grosvenor Casino properties. However, Rank reported a 23% jump in digital division net gaming revenue (NGR) during the full year 2019/20. Rank Group shareholders are due to meet for the company’s annual general meeting (AGM) on 23 November at the group’s Maidenhead head office.