Directors at Bookham may cut holdings

Shares in Bookham Technology, the fibre optics group, dived yesterday after it revealed it is returning to the market for cash just four months after floating, and that some directors were considering joining venture capital investors in reducing their holdings.

Shares in Bookham Technology, the fibre optics group, dived yesterday after it revealed it is returning to the market for cash just four months after floating, and that some directors were considering joining venture capital investors in reducing their holdings.

Andrew Rickman, chief executive, said Bookham's venture capital backers had requested a managed exit from the share register. "They don't feel it's appropriate, as venture capital groups, to hold an investment in a FTSE 100 company. They want to move on to the next exciting start-up," he said.

The news sent Bookham's shares down 222p, or 5 per cent, to 4,185p. Douglas Smith, analyst at DLJ, said of the fall: "It's a short-term supply and demand issue caused by stock coming to the market."

Unlike other hi-tech companies, which were catapulted into the index only to be demoted within months, Bookham has retained its place in the FTSE 100.

Mr Rickman, who holds 24.6 per cent of the company, declined to indicate how many shares he and his fellow directors, who hold 2.5 per cent, might sell. 3i Group, the venture capital fund, holds 6.7 per cent. Scientific US technology groups Atlanta, Cisco Systems and Intel Corporation hold 14.7 per cent. Bookham gave no timetable for the share sales. The 180-day lock-in period applying to principal shareholders ends on 7 October. None of the directors sold shares at the time of the float.

"Nobody's checking out. There will be no significant change [in directors' shareholdings]," Mr Rickman said.

The proposed share sale by existing investors has created the opportunity to issue new shares and raise fresh funds to expand Bookham's manufacturing facilities, Bookham said.

It is to double capital expenditure to around $50m (£31m) this year, rising to $150m in 2001. Demand for its products has accelerated by more than anticipated since April when its float raised £200m, it said. Bookham makes devices that route light through fibre optic cables, using silicon switches that are better suited to volume production.

Bookham posted calender second-quarter sales up 84 per cent at £4.6m from the previous three months. Nortel Networks, the US group, accounted for 59 per cent of sales. Net quarterly losses, before National Insurance on share options, narrowed £1m to £4.6m.

The company announced that Mr Rickman is to assume the chairmanship following the retirement of Professor David Simpson. He will retain his role as chief executive officer.