SGI wired up for £30m flotation

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The Independent Online
SGI, maker and supplier of steel-based products, yesterday published the pathfinder prospectus for its flotation, which is expected to raise £30m to fuel further expansion.

The group said its strengthened balance sheet would allow it to exploit a policy of making selective acquisitions allied to continued capital investment in existing operations.

SGI, which makes a range of wire and wire products, and fabricates and supplies steel reinforcing bar for the construction industry, said the flotation - by way of a placing with institutional investors and offer to broking intermediaries - followed substantial restructuring in recent years. It is expected to value the company, formed following a management buy-in from Transport Development Group in 1989, at around £45m.

A 2 per cent stake is expected to be retained by directors.

The group is a big purchaser of steel rod and bar in the UK, buying more than 270,000 tonnes of these products last year, when it raised operating profits 28 per cent to £6m on sales up 21 per cent to £135m.

Directors said yesterday that they believed SGI's wire business would continue to grow through both development in existing markets and expansion into related markets in the UK and overseas.

The price of the offer is expected to be announced on 9 March. Dealings are expected to start on 21 March.