NFC plans cash call to raise pounds 200m: One-for-six rights issue to allow transport group to repay most of its borrowings

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NFC, the transport and logistics group, is planning to launch a rights issue to raise up to pounds 200m next week.

The cash call, due to be announced with the full-year results on Wednesday, is intended to repay much of the group's borrowings, which stand at more than pounds 260m. It would also allow the former nationalised company to take advantage of any opportunities in the transport sector.

The group is capitalised at more than pounds 1.3bn, and it could raise pounds 200m with a one-for-six issue at a slight discount to its share price, which closed at 252.5p on Friday.

The issue is expected to be backed up by strong figures from the company. The market is expecting profits to recover to nearly pounds 150m, compared with the disappointing pounds 89.9m reported a year ago. Then, the market was unimpressed by the inclusion of a pounds 14.5m pension fund credit, which bolstered the profits.

This year, the figures will be flattered by a pounds 50m profit from the sale of the group's waste management division to Wessex Waste Management, a joint venture between Wessex Water and the US controlled group Waste Management International. It has also sold its Pickfords travel agency operation to Airtours for pounds 14m.

NFC has had problems with its Lynx parcels operation, which has run up losses, and analysts are looking forward to the company being able to give good news about that operation. Its logistics operation has been performing strongly, and the transport and truck rental side is starting to recover after a restructuring.

The company is unique in its profit-sharing structure, which goes back to its buyout from the Government seven years ago. The group is also famous for its annual general meetings, which are among the best-attended of all listed companies, and up till now have included a 'best view' forecast from the company's directors as to what the profits will be.

However, James Watson, who took over from Sir Peter Thompson as chairman last year, said NFC may review the policy of giving a 'best view' because of legal implications in the United States.

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