Safestyle raises £8.5m to strengthen its balance sheet in the midst of the coronavirus

Safestyle, the AIM-listed UK retailer and manufacturer of PVC-U replacement windows and doors in the homeowner market, has completed an £8.5m placing to strengthen its balance sheet in the midst of the coronavirus outbreak.

The deal, led by investment banking boutique Zeus Capital acting as nominated adviser and joint broker with Liberum, sees the placing of 50,000,000 new shares, ensuring that the business has a strong cash buffer to continue business through and accelerate out of the crisis relating to the COVID-19 pandemic.

The shares are expected to be admitted to trading on 28^th April 2020, following shareholder approval at a general meeting.

As part of the transaction, Safestyle’s banking covenants will be waived for up to six months, and a reduced EBITDA covenant target will be in place for the rest of the year following resumption of trading.

Mike Gallacher, chief executive officer at Safestyle, said: “The strong support received from our shareholders, both existing and new, in the current challenging market is hugely welcome. I am also delighted that the board has also committed to contribute significantly to the placing, demonstrating all of our directors’ strong belief in the growth strategy and potential of the group. The business has made strong progress in recent years and I believe that, as a result of the actions taken, we are well placed to weather the COVID 19 crisis and emerge to resume our recent positive momentum.

“Together with our existing funding arrangement, this equity fund raise significantly strengthens our balance sheet, providing further headroom should we need to extend our temporary shutdown in line with Government guidance, protecting the NHS and saving lives.”

A team at Zeus Capital acted as nominated adviser and joint broker on the transaction.

Dan Bate, director of corporate finance at Zeus Capital, said: “We are delighted to have helped Safestyle UK raise £8.5m. The proceeds of the raise place the Company in a resilient position to be able to operate through the COVID-19 pandemic and to recommence positive trading momentum thereafter. It has been a pleasure working with Mike Gallacher, Rob Neale and the Safestyle UK team on this transaction and on an ongoing basis, and we look forward to continue working with them in the coming years.”