On the Beach has raised a further £26 million to boost its cash reserves through a new share placing.
Chief executive Simon Cooper said move would restore the OTA’s cash balance to May 2020 levels.
On the Beach confirmed its plans for the placing on Tuesday (6 July) before revealing the outcome on Wednesday (7 July).
The OTA put up 7.87 million shares, around 5% of the company’s existing issued share capital, at just under £3.50 per share.
Cooper subscribed for 30,303 shares in the raising, taking his holding to 4.75% of On the Beach’s issued share capital, while all members of the company’s board also participated.
Ahead of the placing, On the Beach said the cash would support the firm’s financial resilience, flexibility and firepower, and ensure it was ready to service pent-up demand for travel and capitalise on the restart, while also guarding against a prolonged Covid downturn.
On the Beach is not currently selling any packages departing before 1 September.
Additionally, the firm’s directors said the placing would allow the business to increase investment in its digital platforms, boost brand marketing activity and improve conversion by continuing to offer low deposits.
"The duration of the pandemic and its disruption to the travel sector has been more than anyone could have imagined," said Cooper, stressing the firm’s efforts to manage risk and conserve cash.
He said the group had £30 million in cash as of 31 March 2021, along with access to a £75 million revolving credit facility, which is currently undrawn.
"The placing will position the group strongly for growth while ensuring On the Beach is able to protect its strong market position and appropriately gain market share when there is an eventual recovery in demand," Cooper added.
"During this period of little to no travel, we continue to maintain, repair and re-invigorate the On the Beach brand, recently launching our ’we’re ready when you are’ campaign, designed to increase brand awareness, welcoming our customers back when there is more certainty across the short-haul beach holiday market."