Lookers is looking to raise £80.7 million in a share placing in order to sort the company’s debt and to secure more favourable terms for its banking facilities.

The dealer group is injecting 201,856,192 new ordinary shares into the market priced at 40 pence each to raise the capital.

Lookers’ largest shareholders, Tony Bramall and Trefick, support the fundraising.

As a result of raising the money, Lookers will be able to:

• Repay a £50 million high interest loan, reduce a term loan by £15 million and reduce a revolving credit facility by £11.5 million (which will remain available for further withdrawals)
• Benefit from amended banking facility terms which will reduce interest charges and fees, remove certain onerous banking obligations and improve flexibility

Phil White, chairman of Lookers, said: “Lookers has established a solid basis for protecting profitability in the current difficult trading environment and is trading relatively resiliently. The Group’s balance sheet will be strengthened significantly as a result of the placing.

“The improved capital will enable the group to pursue its development strategy and capitalise on opportunities as the market recovers.”