Wickes poised for pounds 50m cash call
Monday 09 December 1996
"We have not given an exact date for the rights issue but it is likely to be this week," a spokesman said yesterday. The group is expected to seek pounds 50m in a move designed to plug a hole in its finances following the discovery of accounting irregularities.
Potential bidders include building materials giant RMC and Woolworths to Comet group Kingfisher. Analysts believe Wickes would command at least pounds 200m.
The Serious Fraud Office launched an investigation late last month into the former senior executives of the group. Henry Sweetbaum, the company's chairman and chief executive, resigned in June after disclosing that past profits were overstated.
In October it was announced that he had agreed to repay pounds 720,000 of profit- related bonuses.
Former finance director Trefor Llewellyn, who left to join another company, agreed to pay back pounds 485,000.
A report commissioned by the new management from Price Waterhouse and the law firm Linklaters & Paines found that profits had been overstated by a total of pounds 51m over a number of years.
New chairman Michael von Brentano said in a shareholders' circular that Mr Sweetbaum must accept "ultimate responsibility" for the overstated profits, adding that there was no evidence that Mr Sweetbaum or other directors had been aware that supplier rebates had been prematurely booked as profits.
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