The glass and ceramics maker Waterford Wedgwood took advantage of a recent upturn in sales by adding a rights issue yesterday to a high-yield bond issue.
Cash needs to be raised because Waterford has breached covenants on its €338.4m (£236m) revolving credit facility. Shareholders will be asked to buy three new shares at 18 cents for every 11 already held. The shares gained 0.5p to 20.75p on the stock market yesterday, continuing a recovery from a low of 14.75p in June.
The main shareholders, the O'Reilly and Goulandris families, will take their entitlements. The rest of the €38.5m issue is underwritten by the house broker, Davy Stockbrokers. The rights issue means that a seven-year bond, needed to get debt repayments on to a longer schedule, can be scaled back to €165m. The bonds' price will be set in the next two weeks.
After a 9 per cent slump in turnover in the first quarter to June, Waterford saw a sales rise of 3 per cent in September and October compared with the same two months last year. The group made an interim pre-tax loss of €44.8m, after a €32.7m restructuring charge, compared with a €39.2m profit at the same stage last year.
The chairman, Sir Anthony O'Reilly, was confident ahead of the Christmas period, which accounts for 40 per cent of sales. Last year, Christmas trading was "reasonable", but was followed by a sharp fall as the Iraq conflict and Sars hit the sector. He also pointed to "signals" of a recovery in United States, which accounts for 50 per cent of group turnover.Reuse content