Rank Group has raised £70m in an equity placing to strengthen its balance sheet.

“Throughout the Covid-19 pandemic, the company has taken decisive action to preserve cash and protect its balance sheet,” it said. “Despite the challenging trading environment, following the phased reopening of venues starting in July and August, the company had begun to see encouraging performance.”

However, the curfew, the lockdown and other government measures, alongside a deterioration in consumer confidence caused by the pandemic, are expected to continue to dent Rank’s liquidity position in the coming months. As a result, it is not expecting to achieve monthly positive cash generation from its venues while the lockdown remains in place.

“The company is, therefore, looking to further strengthen its balance sheet through the fundraise, in order to maintain appropriate liquidity covenant headroom on its debt facilities under various trading scenarios, provide ample working capital to operate through this challenging environment, and enable the company to continue to deliver on its transformation 2.0 programme.”

Rank said that its lending banks had agreed to extend the £50m minimum liquidity test until March 2022, conditional on the fundraise.