StockMarketWire.com - Digital automotive marketplace Auto Trader said it would raise funds through an equity placing to bolster its balance sheet during the Covid-19 crisis, and was unlikely to pay a final dividend.

The company said the raising would 'ensure we avoid constraints that might otherwise be imposed in the medium term in order to meet debt covenants'.

Auto trader said it would place up to 46.5m shares with institutional investors that would not exceed 5.0% of its current issued share capital.

The price of the placing would be decided at the end of the bookbuilding process.

The company also said it continued to expect results for the year through March 2020 to be broadly in line with market expectations.

'We continue to believe our results for 2020 will be broadly in line with the market consensus, though this may be subject to prudent provisions for post year end events relating exclusively to the impact of the Covid-19 pandemic,' the company said.

The company said no decision had yet been made on its final dividend for 2020, but warned that if the current environment persisted then it was unlikely that one will be declared.

It also said it was too early to provide guidance for the 2021 financial year, which commenced Wednesday.

In an effort to improve liquidity, the company said the board had voluntarily offered to forego at least half of their salaries or board fees for the foreseeable future. The executive directors had also requested that their annual 2020 bonus be waived.

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