Thursday, July 9, 2020

Businesses tap bonds & stock markets for £30bn to survive pandemic

British firms have taken £30 billion in lifelines from financial markets as a blitz of equity and debt is issued to help businesses survive the coronavirus crisis.

Almost 150 companies tapped bond and stock markets to address the cash crunch caused by COVID-19 between mid-March and the end of April, according to analysis by New Financial and BNP Paribas.

Some £25 billion has been raised by 50 firms in the corporate bond market, while an additional 100 companies sold £5bn of stock. Premier Inn owner Whitbread, J D Wetherspoon and catering giant Compass are among those turning to share sales to cope with the sudden stop in economic activity.

“These figures released today demonstrate the strain that many businesses are under, particularly those in the hospitality and leisure industries as their business has almost been non-existent for over two months,” said Reece Tomlinson, CEO and founder of capital advisory firm RWT Growth.

“The capital markets will be crucial for the survival and subsequent growth of the economy, particularly over the next 12 months, so for global investors, it could be a really exciting time for British businesses to be opened up to the rest of the world.

“In the SME space – particularly those in MedTech and biotech – businesses are under increasing scrutiny and investors are already becoming interested in potentially globally facing life science companies.

“For larger businesses with complex supply chains and leading brands, some VC firms may look at this period to aggressively expand some of the nation’s favourite businesses into global players.”

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