UK markets closed

Hotel Chocolat agrees share issue ahead of coronavirus hit

Hotel Chocolat products are seen on sale at Rabot 1745, in London

(Reuters) - British chocolatier Hotel Chocolat <HOTC.L> said on Friday it had agreed to issue new shares to inject 22 million pounds into the business, as it faces having to close its cafe and store locations due to Britain's spreading coronavirus outbreak.

While companies have drawn down cash from existing financing arrangements as the extent of the coronavirus crisis became clear in the past fortnight, few have secured fresh investment as banks and investors await more stable market conditions before making decisions on risk and pricing.

The luxury chocolate maker, retailer and wholesaler increased the cash call from 20 million pounds, however, after strong demand from existing shareholders and other institutional investors.

It has placed just under 9.8 million new shares at a price of 225 pence per share, a discount from Thursday's close of 232 pence.

Co-founders Angus Thirlwell and Peter Harris will each buy roughly 18% of the new shares, the statement said, while non-executive chairman Andrew Gerrie will take about 9%.

Hotel Chocolat said the year had started off well with a 6% rise in revenue last month, but that it now expects to close stores while customers isolate themselves at home.

"The Company's trading in March-to-date has inevitably slowed as the outbreak of COVID-19 has impacted footfall both in the UK and internationally," the UK-listed company said, adding that group retail revenue had decreased 5% year-on-year so far in March.

UK Mother's Day on March 22 and the Easter holiday, when Britons spend heavily on chocolate Easter eggs, typically make up around 12% of the company's overall annual revenue.

British high Street retailer Laura Ashley <ALY.L> announced plans to call in administrators this week due to the outbreak's impact on its performance and its inability to secure more backing.

(Reporting by Muvija M in Bengaluru; editing by Patrick Graham, Kirsten Donovan)