FILE PHOTO: A Foxtons estate agent sign is seen outside a branch in west London, Britain July 29, 2016. REUTERS/Peter Nicholls
(Reuters) – Real estate agent Foxtons (FOXT.L) on Friday proposed a share sale to raise cash and furloughed about 750 of its employees, as it deals with a collapse in commissions and business under Britain’s stringent lockdown.
Britain’s real estate agents, already in a year-long slump, are severely strapped for cash amidst the crisis, and Foxtons is the latest among the more well-known players to tap the market for funds.
The company said net proceeds from the placing will be used to repay the revolving credit facility and to provide sufficient liquidity for it to battle the impact of the pandemic.
“The London property market has been severely disrupted by the necessary measures the country has taken to contain the Covid-19 pandemic,” Chief Executive Nic Budden said.
“Board considers it prudent to raise additional capital at this time to enable the company to maintain liquidity in a reasonable worst-case scenario”.
The company also said all its executive directors and non-executive directors agreed to a 20% reduction in base pay and fees, respectively for April and May.
Foxtons, which rivals Countrywide (CWD.L), also said commissions it earned in the first three weeks of the lockdown in the country were down 47% compared to same period last year.
The company said it would carry out a placing to raise up about 22 million pounds through issue of up to 55 million new ordinary shares.
Reporting by Samantha Machado in Bengaluru; Editing by Saumyadeb Chakrabarty