WH Smith said it has secured a new £120 million loan and will raise more cash to help it get through the coronavirus crisis.

The high street retailer said it has seen a “substantial downturn in economic activity” as a result of the virus.

It closed the majority of its stores after the Government called for non-essential stores to shut, but its Post Office branch sites and hospital stores have remained open.

The company said the new lending facility is conditional on it raising new equity to support its operations.

As a result, the group is “in an advanced stage” of preparation for an equity raise of up to 13.7% of its issued share capital through a placing of shares.

It said the loan will “strengthen its balance sheet, working capital and liquidity position” to aid it through uncertain times.

Shares in the books, newspaper and stationery business have fallen more than 50% in the past six weeks.

In a statement, the company said: “These financing arrangements, coupled with a broad range of mitigating actions to manage the cost base and cash-flow, will provide sufficient liquidity to deal with this most challenging of trading environments.

“A further announcement will be made as and when appropriate.”

The retailer saw its shares lift higher in early trading on Monday, jumping 8.7% to 1,098p.