Invensys plans rights issue as part of £1bn fund-raising
Friday 26 May 2006
The news came as the group revealed it had put itself back in the black for the first time in four years in 2005, generating a pre-tax profit of £22m, compared to a loss of £106m, last year.
The group said it plans to raise £341m through a two-for-five rights issue, as well as an additional £700m via a new bank facility. It also said it had raised a further £157m via the sale of its US and Asian building systems operations to a French company, Schneider Electric.
Shares in the rights issue are to be offered at 15p, a discount of just under 25 per cent to yesterday's opening price of 19.75p.
The company said it plans to use the proceeds mostly to pay down its existing expensive debt facilities.
"The additional flexibility and financial strength arising from this refinancing will enable Invensys to compete on a more equal footing with our competitors," said Ulf Henriksson, the chief executive.
"This positive momentum will enable us to have conversations about growth with employees, customers and suppliers.
"It will increase customer confidence, leading to higher growth potential, and will provide the means to reduce risk and lower costs through joint venturing, particularly in controls. It will also increase our ability to attract and retain key staff and will underpin our existing and future plans."
Although the refinancing was unexpected, investors reacted positively to the news yesterday, sending the shares as much as 10.1 per cent higher in early trading. The stock eventually closed up a little under 9 per cent at 21.5p, giving the company a market value of £1.22bn.
While the group's overall results were strong, the company conceded it had had a difficult year in its controls division, where operating profits fell by a quarter.
However, overall operating profits were up 11 per cent at constant exchange rates. The group said it was confident that the controls division was now stabilising after a difficult couple of years.
- 1 Nigel Farage: Me vs Russell Brand on Question Time – he's got the chest hair but where are his ideas?
- 2 Harry Potter fans can apply to the Hogwarts-inspired College of Wizardry
- 3 Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
- 4 Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
- 5 Orange Wednesdays are no more
Weather bomb in pictures: Storms cuts power for tens of thousands – and snow is on the way
Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
Russell Brand was rendered speechless on Question Time by this man
Fury at Airbus after it hints the super-jumbo may be mothballed
Disgruntled RBS worker writes hilarious open letter to Russell Brand after anti-capitalist publicity stunt leaves him hungry
Shock poll shows voters believe Ukip is to the left of the Tories
Nigel Farage's approval rating hits 'record low' as popularity suffers in wake of Ukip sex scandal
Ukip candidate jokes about 'shooting peasants' in racist and homophobic rant
Pakistan school attack live: Taliban kill at least 132 children in 'horrifying' massacre
Germany sees 'visible rise' in support for far-right extremism in response to perceived 'Islamisation' of the West
iJobs Money & Business
£32000 - £35000 per annum + benefits: Ashdown Group: Marketing Services Manage...
£Neg. (DOE) + Excellent Benefits: Guru Careers: A Finance Account Manager with...
£40000 - £470000 per annum + bonus: Ashdown Group: Java Developer / J2EE Devel...
£45000 - £55000 per annum + Benefits: Ashdown Group: An exciting opportunity h...