Pendragon launches rights issue to deal with debt
Friday 15 July 2011
Pendragon, Britain's biggest motor retailer, is to raise £71m through a discounted rights issue in order to tackle its debts.
New shares valued at just 10p each will be offered to existing shareholders on the basis of nine for every eight already held, the company said yesterday.
Shares in the company initially fell almost 24 per cent before ending down just 0.25p at 21.5p, giving an effective price after the rights issue of 15.4p.
Alongside a newly negotiated debt refinancing package which has extended the maturity of the group's borrowings to 2014, on improved terms, the money raised will enable Pendragon to pay down its debts and re-start dividend payments from next year.
Pendragon – which owns the Stratstone, Evans Halshaw and Chatfields car dealership chains – has also agreed a plan that will eliminate the group's pension deficit and create cash savings of £46m by the end of 2014.
Its chairman, Mike Davies, yesterday described the measures as "an important step in the evolution of Pendragon".
"These proposals recapitalise the group, providing it with greater strength and flexibility," Mr Davies said. "We are now better placed to pursue our clear strategy and implement our operational initiatives, which we believe will create further value for shareholders."
The company also confirmed it is trading in line with forecasts.
- 1 Michelle Watt's father says TV presenter killed herself because she was in constant pain
- 2 Nathan Collier: Montana man inspired by same-sex marriage ruling requests right to wed two wives
- 3 'Help me I'm trapped in a factory' messages keep being found on bottles of vitamin water
- 4 North Korean defector flees to Finland 'with evidence of chemical testing on humans'
- 5 Greek debt crisis: The photograph that conveys the despair of Greece's elderly
Nathan Collier: Montana man inspired by same-sex marriage ruling requests right to wed two wives
Greece crisis: IMF was pushed around by Angela Merkel and Nicholas Sarkozy – and now it is being humiliated
'I wish the BBC would stop calling it Islamic State' – David Cameron unleashes frustration at broadcaster
Forget little green men – aliens will look like humans, says Cambridge University evolution expert
Greece crisis: The wider lesson is that it’s time to abandon this failed experiment in currencies
Girl, 7, stares down hate preacher at Ohio festival with pro-LGBT rainbow flag gesture
iJobs Money & Business
£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...
£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...
£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....
£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...