William Hill is set to raise an additional GBP 350 million

UK online and land gambling group William Hill plc is set to raise an additional GBP 350 million through a rights issue, reports The Times. The cash will be used to refinance the company's debt, the newspaper reports.

Chief executive officer Ralph Topping is expected to announce the fundraising this Friday with the group's annual results. The rights issue is likely to be fully underwritten by Citigroup, William Hill's financial adviser and broker.

The Times says the move is part of a wider plan to restructure the group's GBP 1.2 billion in debt. The lending arrangement expires in March 2010, but the company's banks, which include Barclays, HSBC and RBS, are expected to agree a new facility. Investors will have to forego a dividend, saving the company around GBP 70 million, but seem prepared to do this, reports the newspaper.

Investors will be encouraged by Will Hill's last statement in January in which it said current trading was going reasonably well - gross win, the amount of money staked minus what it pays back to winning punters, was up 8 percent for the previous 11 weeks against a year earlier.

Clearly the economic recession and its likely impact on the company is being closely watched. A big concern is unemployment. Citi leisure analyst Richard Taylor wrote in a research note last week that with unemployment forecast to peak at 10.1 percent in 2010 – similar to its high in the early 1990s when William Hill's shops saw a 7 percent drop in turnover – "we do not believe it is unreasonable to assume a similar potential hit to revenues in 2009 or 2010".

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