International event supplier Arena Group has raised £9.5m (USD$11.4m) through a subscription and placing of new shares, to help it weather the storm of Covid-19.
Saudi Arabian TasHeel Group, which provides visa, travel, concierge and other services, has subscribed to 60m new Ordinary Shares at an Issue Price of 10p per share. This represents £6m of new capital.
In addition, Arena has raised £3.5m through Placing Shares. Arena CEO Greg Lawless has agreed to subscribe for 2.5m Placing Shares, while Lombard Odier Investment Managers Group (LOIM) has agreed to subscribe for 18.8m Placing Shares.
As well as the £9.5m raised through shares, Arena has agreed an additional loan of £4.75m from HSBC. Arena’s Directors say this total sum of £14.25m will help the company through this period of uncertainty “for the foreseeable future”.
A breakdown of the company's shareholders can be seen below:
Weathering the storm
The new funds will be crucial in helping Arena through the difficult period of April-May, in which the majority of events have been cancelled due to Covid-19.
Arena says it has implemented measures throughout the Group to conserve cash, including permanent and temporary lay-offs, reduced working weeks, partial or full salary reductions and unpaid leave.
Arena received an offer for a take-private transaction from a consortium of investors in mid-February. Despite the completion of early-stage due diligence, given the level of market uncertainty as a result of Covid-19, transaction discussions were terminated on 13 March 2020.
Comment from the CEO
Greg Lawless, Chief Executive Officer of Arena, commented: “We are delighted with the support we have received from our shareholders and lending bank. The funds raised will allow the Group to continue operating as it navigates its way through this difficult period.
“We have been working tirelessly to implement plans to limit the human, financial and commercial consequences of this terrible health disaster on all Arena stakeholders. We have initiated significant cash conservation initiatives across all divisions of the Group, whilst ensuring the health and safety of all our employees to secure the long-term future of the Group.
“These initiatives have significantly reduced the Group’s future monthly cash outflows which together with the additional financial support from our shareholders and our lending bank puts the Group in a strong financial position to weather the very difficult current market environment.
“We continue to work with all our customers in relation to events scheduled to take place after May in order to mitigate the possible financial and operational impacts in the case further events are cancelled."
Pictured: Arena completed the design and installation of the 15,000-seat Diriyah Arena and hospitality structure, ahead of the Joshua v Ruiz II heavyweight boxing ‘Clash on the Dunes’ on 7 December 2019 in Saudi Arabia.