The Viva Leisure Ltd (ASX: VVA) share price is back from its trading halt and pushing higher on Monday morning.
At the time of writing, the health club operator's shares are up 2% to $3.10.
This leaves the Viva Leisure share price trading within sight of its record high of $3.31.
Why was the Viva Leisure share price in a trading halt?
Viva Leisure requested a trading halt late last week so it could undertake a fully underwritten $30 million institutional placement.
This morning the company announced the completion of the institutional placement, raising $30 million at a 4.3% discount of $2.90 per new share. Approximately 10.3 million new Viva Leisure shares are to be issued under the placement.
According to the release, the placement was well supported by both existing shareholders and several new institutional investors.
Why was Viva Leisure raising funds?
Management advised that the proceeds will be used to pursue future growth opportunities. This includes the acquisition of health clubs and locations, the buyback of franchisee owned Plus Fitness centres, and greenfield rollouts.
It believes this will accelerate Viva Leisure's growth and help it execute on its target of having 400+ corporate owned locations by 2025. This compares to the 79 locations it had operating at the end of FY 2020.
Management notes that it has identified a plan to add approximately 300 locations across its network. This will be through utilising its pipeline of franchisee owned Plus Fitness franchises, the continuous roll out of new greenfield locations, and other acquisitions.
Viva Leisure's CEO and Managing Director, Harry Konstantinou, commented: "We are pleased with the support that Viva Leisure has again received from both existing and new institutional investors. We will look to immediately deploying the funds raised to accelerate our growth and execute on our 2025 target of having 400+ corporate owned locations."
