Chastened EuroDollar nips in at 220p

EURODOLLAR is raising pounds 7m less than originally envisaged to try to ensure a successful market debut, writes Tom Stevenson.

First dealings in the UK's second-largest car rental business have been fixed for 8 July after a week in which the flotation hung in the balance because of volatility in the stock market.

The pricing of the issue yesterday at 220p a share followed two relatively stable days in the market, allowing SG Warburg, stockbroker to the float, to place 17 million shares with institutions.

A further 5.7 million shares are available to the public, with applications due by next Friday. In total the flotation will raise pounds 50m, pounds 37.7m for the company. Existing shareholders are raising about pounds 10m.

The issue, which will value EuroDollar at pounds 107.9m, had been due to be priced last Wednesday. The collapse of the stock market on Monday left Warburgs unable to guarantee institutional support.

The postponement was another setback for the new-issue market. British Printing, part of the former Maxwell empire, recently put off its pounds 250m float. Other casualties include London Capital Holdings, the former Randsworth Trust property company, and three cable companies.

The decision to scale back the size of the EuroDollar offer followed a similar reduction earlier this year by Redrow, the housebuilder, which settled for a market capitalisation of pounds 198m against initial estimates of pounds 250m.