It also warned that its final dividend for the year to March would be cut from 7.25p to 4.8p, which, after a cut at the interim stage, means the total payment will fall by a third to 7.5p. The cut had been expected in the City, but the group's shares fell 17p to 217p.
Analysts attributed the fall partly to shareholders switching into the bonds. These carry an interest rate of between 7.25 and 7.5 per cent, and are convertible into ordinary shares in five to 15 years. On the lower dividend, the group's shares yield 4.6 per cent.
BPB will use the proceeds of the bond to reduce the proportion of its pounds 260m net debt that matures in less than three years. John Maxwell, chief executive, said the group had also altered its policy of matching foreign assets with foreign borrowings since sterling was devalued last September. The proportion of currency debt has declined. At the last year-end, 85 per cent of its pounds 215.7m debt was in foreign currency.
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