Travel firm share placing seeks to raise £67 million

Stockport-based online travel firm, On The Beach, is seeking to raise £67.3 million through a share placing.

On The Beach plans a placing of 19.9% of its existing share capital, worth about £70m, in order to cope with the downturn in international travel and to enable the firm to emerge in a strong position.

26,143,500 shares have been placed by joint bookrunners Numis Securities and Peel Hunt, priced at 257.5 pence each.

Through the government backed Coronavirus Business Interruption Loan Scheme, On The Beach has also increased its credit facility to £75 million, to allow the company to see through the downturn in the holidays market. The firm has recently reduced expenditure to around £2 million per month, and believes itself to be in a strong financial position relative to others in the sector, as customer payments are ringfenced until date of travel, and not used for day-to-day expenditure.

Simon Cooper, chief executive of On the Beach Group, commented:

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.

“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.

“There is no doubt that the group’s asset light and flexible model, combined with its ring-fenced trust account for customer funds, helps to differentiate On the Beach from its competitors and has stood us apart when providing customers the refunds they are entitled to in these difficult times.”