Wickes pounds 50m rights issue this week

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The Independent Online
Wickes, the troubled DIY chain, is set to launch its long awaited pounds 50m rights issue this Thursday to plug a hole in the group's finances after the discovery of accounting irregularities in June, writes Paul Farrelly.

The equity issue, which will be underwritten by merchant bank advisers Warburg, will pave the way for a relisting of the group's shares in January.

The group also plans to dispose of its European operations in Holland, Belgium and France to refocus on its core UK operation and has already been in talks with potential buyers.

Non-executive directors Sanford Kaplan and Sanford Sigoloff, who are close to former chairman and chief executive Henry Sweetbaum, are expected to resign shortly to complete a near near clean sweep of the board.

Wickes sources say, however, that this week will bring no news of a successor to current chairman Michael von Brentano, who has already indicated a wish to step down after the refinancing is complete.

Ten days ago Wickes appointed Bill Grimsey as new chief executive and Nigel Whittaker, formerly with Kingfisher, as a new non-executive director.

The move followed news of a Serious Fraud Office investigation into the affair, which involved duping Wickes' auditors about the true nature of rebates from suppliers.

The SFO has yet to begin interviewing current and former staff, including Mr Sweetbaum and former buying director Les Rosenthal.

The SFO has sweeping powers to compel people to give evidence under Section 2 of the Criminal Justice Act.

Any such evidence, however, unless it is corroborated elsewhere, cannot be used in a court of law.