Alan Jones, chief executive, said: "It will put the whole business on a much sounder footing. I have come under tremendous pressure from our managers on a number of investments we want to make. It is right to persevere with our programme."
BICC's two-for-11 cash call at 270p will help fund investment opportunities at home and abroad worth pounds 215m.
The company plans to spend about pounds 140m on higher-margin optical fibres, data communications cables and high-voltage cabling. Another pounds 40m is earmarked for the Asia-Pacific region while pounds 35m will go to fund the Government's Private Finance Initiative scheme where its Balfour Beatty division is already involved in pounds 186m of road projects.
Although the money raised will be used to fund expansion, Mr Jones said the immediate effect would be to reduce the level of gearing from 80 to 30 per cent. "I like to think I am a grower of business," he added. "But they have to achieve a 20 per cent return on assets and be companies that lead their markets. That said, I do see myself as being a bit tight with cash."
Since arriving last year from Westland, the helicopter manufacturer, Mr Jones has undertaken a strategic review of BICC. In the year to June BICC set aside a total of pounds 107m for reorganisation, rationalisation and related asset write-down in its cables activities.
One of the actions taken by Mr Jones was to halve the workforce at its German low-voltage cable subsidiary.
In August BICC reported a half-year loss of pounds 2m against a pounds 60m profit last year due to hefty restructuring costs. Analysts expressed concern then that as national utility and telecom companies were privatised, cosy relationships with cable suppliers would end.
They felt the tough pricing climate could continue for up to two years, leading players like BICC to concentrate on higher-margin products.
BICC also said it was likely to maintain the final dividend at 8.5p, taking the year's total to 12.5p.
The cash call has been underwritten by Schroders. Cazenove and the corporate finance division of Hoare Govett are joint brokers to the issue. Dealings in the new, nil-paid shares will start on 20 September.
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