Imperial given rights issue support

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The Independent Online

The Lambert & Butler cigarette maker Imperial Tobacco today said it had secured the backing of investors for its £4.9 billion cash call.

The company announced that 97.19 per cent of investors agreed to buy shares under its fully underwritten one-for-two rights issue at 1475p each.

Imperial is raising the cash as part of a move to repay debt after its £11 billion buyout of Spanish firm Altadis, which owns brands such as Gitanes.

As a result of the push to tackle debt, Imperial Tobacco said it would be able to maintain its investment grade credit rating and its dividend policy.

Imperial recently reported profits from operations of £918 million for the six months to March 31, an increase of 38 per cent after benefiting from a contribution from Altadis following the acquisition in late January.

However, bottom-line profits reduced to £326 million - a drop of 44 per cent - when restructuring costs and one-off accounting measures are included.

Volumes were 121.1 billion cigarettes - up from 90.7 billion in 2007 due to a combination of organic growth and the contribution of US acquisition Commonwealth Brands and Altadis.

The company increased its share in a number of markets in Europe, particularly in France, Spain and Germany combined with a "robust" performance in the UK.

Shares opened 10p lower at 2013p today.