Inland Homes is looking to raise £9.9m to help restart operations once Covid-19 restrictions are lifted.
The South of England housebuilder will issue a placing of new ordinary shares at 10p per share and a separate private subscription at 47.5p per share to directors.
The capital raising will comprise up to 20.75m shares, representing 9.9% of the existing issues share capital of the company.
Inland said the proceeds would enable payments to subcontractors and supply chain and provide additional liquidity to deal with the economic challenges in the pandemic.
In a trading update, it said the crisis had cost it £46.2m in five significant transactions with housebuilders.
These would have helped to reduce the company’s debt, but were aborted in March.
Inland said it expects all planned home sales will be delayed by at least two months and the majority of land sales will be delayed by up to six months, including major land sales expected in the previous half year.
These delays will result in revenue, gross and operating profit in the period being impacted significantly, it said.
Inland Homes had £17.8m in cash and net debt of £150.3m at 31 March. It has undrawn facilities of £7.4m and an accordion facility of £20m with HSBC.
It is in discussions to renew a revolving credit facility of £17.2m and has a land facility of £4m that expires in August which it will seek to extend.
Chief executive Stephen Wicks said: “The group has taken a number of measures at these unprecedented times to conserve cash and protect the underlying value of the group’s assets.”
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