Bristol-based bar chain Loungers has put 99% of employees on furlough, slashed its directors’ salaries in half and is aiming to raise more than £8m by issuing new shares as it takes action to protect the business during the coronavirus pandemic-induced lockdown.
With all the group’s 167 Lounges and Cosy Clubs across the UK closed, it has looked at all possible measures to keep the fast-growing business operating. 
It is also pausing all capital expenditure, renegotiating creditor payment terms, negotiating with landlords and utilising other government initiatives such as the business rates exemption and VAT payment deferral.
However, the group is still understood to be losing £480,000 a week. The group had £4.1m of cash on its balance sheet, undrawn facilities of £3m and net debt of £35.4m on April 17, it said.
It has also agreed an incremental £15m revolving credit facility for 18 months with its banks Santander and Bank of Ireland.
In a statement to the London Stock Exchange it said its ‘value-for-money’ offer, broad customer base, historically low rent to revenue ratio, limited exposure to central London or travel hubs and negligible exposure to tourism, left it “very well positioned to recover quickly” once its sites are permitted to reopen and to adapt to any changes in consumer behaviour and demand.
It is placing of up to 9,250,000 new ordinary shares of 1p each to also provide capital to enable the group to emerge strongly from lockdown and recommence its roll-out once consumer confidence has returned and trading conditions allow.
The neighbourhood café-bar operator floated on the London Stock Exchange a year ago. At the time it announced ambitious plan to grow to 500 outlets across the UK.
The firm, which opened its first bar in Bristol in 2002, has expanded rapidly in recent years.
Previously owned by its founders Alex Reilley, Jake Bishop and Dave Reid and other investors, it was acquired by private equity firm Lion Capital in 2016 a deal that valued it at £137m.
