TOBY Carvery's owner is to raise £350 million from its largest investors to shore-up finances as pubs and bars remain shut across the UK.

Mitchells & Butlers – which runs the Toby Carvery in Bradford Road, Keighley, as well as a number of pubs across the district – said it was issuing around 167 million new ordinary shares, with a subscription price of £2.10 per share.

A warning was issued that without the boost, the future for the company's 40,000-plus employees would be “bleak”.

The group – which also owns pub chains including Vintage Inns and Harvester – said a consortium of three of its largest investors had said it would be able to make the whole £350m available.

Piedmont, Elpida Group and Smoothfield have joined forces to create a new holding company, Odyzean.

The firms said the new consortium would help address “the significant capital needs of Mitchells & Butlers”.

Odyzean says it is fully supportive of the current management team but that it plans to review the composition of the board of directors.

A spokesman said: “Without this major equity injection, the prospects for the business, its 1,600 venues and over 40,000 UK employees would be bleak.

“Our significant financial commitment will help to secure the future of the business and provide a platform for the strong management team to restore the company’s operations to good health when circumstances allow.”

Mitchells & Butlers also told investors that it has secured an agreement with banks for a new £150 million credit facility as part of the financial shake-up.

Last month, the pub owner said it had only £125m in cash reserves and was burning through between £35m and £40m each month its sites remained shut.

Chairman Bob Ivell said: “We are pleased to have received the support of our major shareholders and key creditors.

“Mitchells & Butlers was a high-performing business going into the pandemic and this capital raising and refinancing will provide it with the certainty of funding needed to emerge in a stronger position."