Biffa announces today its intention to raise c.£100m of gross proceeds through a non-pre-emptive placing of new ordinary shares of 1 pence each in the capital of the company.
In conjunction with the placing, all members of the Board and Executive Management Team intend to subscribe for “new ordinary shares” in the capital of the company at the placing price.
In addition to the placing and the subscription, there will be an offer by Biffa on the PrimaryBid platform to provide retail investors with an opportunity to participate.
This is further to the disclosure made by the company on 5 June in the annual results announcement that it would be considering funding options including raising equity capital to allow it to continue with its growth investment opportunities without delay.
Biffa entered the COVID-19 crisis with “strong momentum” and a clear and ambitious medium-term strategy for growth, based on £250m of identified organic and inorganic investment opportunities across waste collection services, closed-loop plastics recycling and energy from waste infrastructure.
Since the outbreak of COVID-19, the Group has taken decisive action to protect the health and safety of colleagues and customers, continue to deliver its essential services to the communities it serves and safeguard the Group’s financial position
As a result of the actions taken, the Group has sufficient liquidity to trade through all modelled scenarios, as set out in the recent annual results announcement on 5 June 2020.
Our immediate priorities throughout the COVID-19 crisis have been protecting our people, continuing to serve our customers and maintaining our financial strength.
The proposed placing will put the Group’s balance sheet in a position of strength, it says, providing the flexibility and confidence to continue to pursue highly attractive identified organic and inorganic growth opportunities in line with its strategy.
The Board also anticipates a number of opportunities will arise from COVID-19, in particular in its Industrial & Commercial (“I&C”) business, and balance sheet strength will allow the Group to move swiftly to take advantage of additional accretive distressed opportunities.
Michael Topham, Chief Executive, commented: “Our immediate priorities throughout the COVID-19 crisis have been protecting our people, continuing to serve our customers and maintaining our financial strength. I am proud of the swift and decisive action we have taken to safeguard our future prospects. The response of the entire Biffa team has been exceptional.
“The proposed Placing builds on these actions, providing enhanced resilience and financial flexibility as we look ahead and refocus on delivering on the compelling growth opportunities that we outlined at our Capital Markets Day last year and in our recent annual results announcement.
“Not only will strengthening our balance sheet allow us to recommit to these highly attractive investment opportunities with confidence, it will also provide us with the support to take advantage of the growth opportunities we expect to arise out of the crisis, in particular in our I&C business, where we have an extensive track record of successfully acquiring businesses in this highly fragmented market and integrating them into our Collections platform at highly attractive returns.
“Biffa went into this pandemic as a leader in the markets we serve, with good momentum and a clear strategy for growth. I look forward to building on this success by executing our strategy, delivering high-quality services to our customers and generating strong and sustainable returns for our shareholders.”