The company also declared a pounds 59m loss for the year to September and said that its chairman and finance director were standing down. Bob Sellier, chief executive, added that he planned to retire within two years.
Having expanded fast during the property and housing boom of the late 1980s, Lovell was brought to its knees by borrowings both in the UK and the US. The company last made a profit in 1990.
The refinancing will see a syndicate of banks led by Barclays swap debts totalling pounds 46m for convertible preference shares. A further pounds 32m is to be raised by a placing and open offer.
The fund-raising will leave Lovell with net assets of pounds 60.6m and gearing of 30 per cent. As at the September year-end the company had negative shareholders' funds of pounds 13.3m.
The convertible prefs are exchangeable for ordinary shares at an equivalent price of 12.5p, while existing shareholders can subscribe for new equity at 10p on the basis of 19 new shares for every five held. The shares closed 4.75p lower at 11p.
Before exceptional items, continuing operations made a profit for the year of pounds 368,000 from sales of pounds 221m. Lovell's social housing partnerships made a pounds 3.5m profit that was largely offset by losses from construction, plant hire and UK and US housebuilding.
Exceptional items of pounds 55m included a pounds 26m loss from discontinuing operations, which include the company's remaining Spanish housebuilding activities, property companies, and the urban renewal division set up to build houses in inner-city areas. Loss per share was 71.2p and there was no dividend.Reuse content