Gestetner raises 16m pounds via placing

GESTETNER, the photocopier leasing company, has raised pounds 16m to restore its balance sheet, which was deeply scarred by pounds 50m of write-offs last year.

The company said it was also on the look-out for small acquisitions and the cash-raising would give it the financial strength to make purchases.

Gearing will fall from 66 per cent to 53 per cent. Gestetner is raising the money via a placing of new shares among institutional investors.

The placing will increase the number of shares in issue by 5 per cent. Gestetner has placed the maximum permitted under Stock Exchange rules. If it wanted to broaden the equity base further the company would have had to hold a rights issue.

Inchcape, the international business services group, owns 15 per cent of Gestetner. Inchcape also has convertible loan stock, which could take its holding to 25 per cent if conversion took place.

Stephen King, Gestetner's finance director, said he would like to see gearing fall further. However, if Inchcape converts its loan stock into shares, gearing will fall to 30 per cent.

About half of Gestetner's business is in Europe. The shares fell 8p to 181p.