DIXON Motors is removing debt from its balance sheet before it expands its car dealership network, writes John Shepherd.
Shareholders are being asked to pump in pounds 6.8m through a one-for-three rights issue at 180p a share, a near-16 per cent discount to the market price of 208p.
The directors are not taking up rights on 1.6 million shares, which cuts their combined holdings from 42.2 per cent to slightly more than 30 per cent.
Dixon is also moving from the USM to a full listing. It joined the USM last year by reversing into the Plateau Mining shell company.
All Dixon's pounds 5m of debts will be repaid and the remaining pounds 1.8m will be used for site developments. Dixon wants to increase its 16 franchised dealership network by 25 per cent over the next year.
Existing dealerships are housed on 12 sites, and cover nine manufacturers including Toyota, Vauxhall, Rover and Nissan. Dixon is in final negotiations for a Nissan franchise in central Yorkshire.
Garry Cuthbertson, finance director, said the outlook for car sales was good, particularly the secondhand market. Dixon sells 17 used cars for every 10 new ones.
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