Marston's, the UK brewer and pub owner, plans to raise GBP176m (US$288m) via a share rights issue in order to expand its pub network by taking advantage of lower land and property prices.

Marston's said today (18 June) that it will use GBP140m of the funding to "acquire and develop new pubs over the short and medium-term".

The group plans to issue nearly 300m new shares at a discounted price of GBP0.59 per share. Marston's closed on the London stock exchange yesterday (17 June) at GBP1.40 per ordinary share.

"The current market environment represents a rare opportunity to secure excellent sites on attractive terms," said Marston's CEO Ralph Findlay.
  
He added that Marston's, which already has more than 2,200 managed and tenanted pubs, plans to build new pubs rather than acquire existing ones.

"The roll-out of new build pubs can generate higher returns at lower risk than acquiring mixed packages of existing pubs and is important to our long term strategy to drive shareholder value."

Marston's plan is similar to a rights issue announced by rival Greene King recently.

The remainder of the rights issue funds will be used to pay down company debt, Marston's said. The issue is subject to approval by shareholders at an extraordinary general meeting to be held on 6 July.