Logica to issue £85m of shares to tackle debt

The technology group Logica last night made a surprise move to tap its largest shareholders for £85m as it looks to reduce its levels of debt.

The company said it was going to raise capital by placing 122 million shares with investors at "no less" than a 5 per cent discount of 68.75p, yesterday's closing price. The Logica chief executive, Andy Green, was quick to claim that the move was "low risk".

"There has been a severe tightening of the debt markets over the last six months," he said. "We concluded it was right to take decisive action."

The group said there was no change in trading since its interim management statement was issued last month but it was the right time to tackle its debt burden. It raised €500m (£440m) in bank debt last month. Logica's main shareholders, Aviva and Schroders, which own 24 per cent of the company, supported the move, Mr Green said.

Logica will also slash its dividend to about 3p, compared to 5.8p last year.