Informa £1bn share placing oversubscribed, as events worth £610m postponed or cancelled

International exhibitions, events and information group, Informa plc, has issued a new placing of ordinary shares as part of an extension of its Covid-19 Action Plan. The proceeds of the placing, which EW understands has been oversubscribed, will be used to strengthen its balance sheet and reduce overall debt.

The total number of shares will be approximately 19.99% of the company’s existing issued share capital and equate to approximately £1bn (US1.25bn). Combined with other financing measures, the share placing will increase Informa’s total liquidity to £2.3bn.

An estimated 410 events, consisting of 60 large brands and 350 small brands have now been rescheduled by Informa as a result of Covid-19. The share placing can be seen as a further indication of the company’s approach to move early and flows from the scenario planning around the time of the group’s Results, announced 10 March.

The company, in a trading update, said it has simultaneously announced reductions in costs and the temporary suspension of dividends alongside its proposed issue of new equity.

Informa also said it would secure £130m+ of direct/indirect savings, including the removal of all discretionary costs, a recruitment freeze and a Board/Leadership salary sacrifice. It announced voluntary pay cuts of 33% for the CEO and CFO, and 25% for the Board and international executive management team.

The company is extending its Postponement Programme and said that £460m+ of revenue had been rescheduled to Q3/Q4 2020 and less than 10% of Events revenue had been cancelled to date. The group said it had rephased (biennials)/cancelled 60+ brands, with revenue of £150m+.

The group acknowledged the clear short-term disruption in its events business, saying that, “Since the end of January in Mainland China, the scale, depth and reach of the Covid-19 pandemic has extended beyond initial predictions, significantly impacting the world, global commerce and business and, in particular, the group’s Events-related businesses”.

Addressing the reasons for the new share placement that the impact on the group’s Events-related businesses, which provide around 65% of revenue, Informa said the situation had intensified significantly since the initial disruption in Q1 and that the group’s current operating plan now assumes this stretches through Q2 and much of Q3.

The group, in its update, said its B2B events businesses continued to see customer re-bookings and low demand for rebates.

Informa picked out strong rebooking trends for 2021 in Healthcare & Pharma (Arab Health +20%) and Construction & Real Estate (The Roofing Show +11%).

The company update also noted there was now full remote working in place among its teams, a sabbatical programme and that it had launched the Informa Colleague Support Fund.

Stephen A. Carter, Informa plc Group Chief Executive, said in his note to the trading update: “Since the beginning of 2020, the impact of the Covid-19 pandemic has become progressively deeper and more far-reaching than initially predicted. We have continued to adapt and respond quickly, always prioritising the safety of colleagues and customers, making decisions for the long-term value of our brands and businesses and seeking to preserve jobs and invest in our intellectual property.”

He added: “The strength of our specialist brands and customer relationships continues to provide confidence in our long-term value. However, in the near-term, we are facing material disruption in our Events-related businesses, with expectations for a gradual and phased recovery.

“Today we are taking action to stay ahead of this by building further stability and strength across our business. Through a range of measures, further reducing direct and indirect costs, supporting colleagues and fully securing our finances, we are ensuring we can continue to manage Informa in the best interests of its long-term stability and strength.”

Informa’s update also spoke of a likely ‘phased return’ for events with social distancing and other control measures being relaxed gradually to avoid a risk in resurgence in infections.

The pace of exit from Covid-19 will also vary by region, Informa believes. “Within China, a number of commercial centres have approved the issue of events licences, but others have yet to and so the group is planning on a phased return through the second half of 2020,” the update added.

Informa said that, as events return, it would be focusing initial participation around domestic audiences (c75% of exhibitors) and was planning on a longer lead time before the full return of international hosted buyer communities.