IRC in search of £2.1m fundraising to reduce debt

Manchester-based restaurant group Individual Restaurant Company has announced it is fundraising by way of an Open Offer to raise approximately £2.1m to reduce debt.

IRC, which operates 18 Piccolinos and 10 Restaurant Bar & Grills, said the Open Offer is being partially underwritten by Blackstar, an Isle of Man-based trust owned by Malcolm Conrad Walker, who founded Iceland.

IRC announced on the London Stock Exchange the Open Offer is to be made "by way of a circular to be sent to qualifying shareholders" who will be given the opportunity to subscribe to 4.1 new shares for every 10 existing shares. A total of 16,195,885 new shares are being offered at 13p each.

IRC said dealings are expected to commence in the Open Offer shares on 9 July 2009, following an application being made to the London Stock Exchange for the Open Offer shares to be admitted to trading on AIM.

The company said: "The purpose of the fundraising is to reduce the company's indebtedness to a more appropriate level for the current economic climate. The fundraising will utilise the company's existing share authorities as conferred at its Annual General Meeting held on 21 May 2009.

"The company noted in its preliminary results statement on 30 March 2009, that trading in the second half of 2008 was challenging, with such conditions continuing in 2009. Against this backdrop the company has successfully renegotiated its £18.5m facility with Lloyds in March 2009.

"However, the new facility requires regular amortisation payments starting in December 2009 culminating in a bullet repayment of £13.0m in January 2012. This repayment profile restricts the expansion plans of the business. Given these restrictions the board does not believe financing new restaurant openings through additional debt capacity is sustainable in the short to medium term. Accordingly, the board has examined a wide range of options to raise additional capital and firmly believes the fundraising is the most suitable method of raising finance for the company in the current economic climate."

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