Contractor says 38% of new shares have been taken up
Just over a third of Kier’s new shares offered as part of its debt-busting rights issue have been taken up by existing investors.
The contractor, which fell out of the FTSE250 stock market index earlier this month, announced the fully underwritten 409p rights issue on the last day of November and plans to spend the net cash proceeds of £250m on sorting out its balance sheet.
It said 24.3 million shares had been taken up by existing shareholders, equivalent to 38% of the total new shares issued. The balance has gone to institutions such as pension funds which underwrote the transaction.
In a statement, Kier’s chief executive Haydn Mursell said following the completion of the deal the firm would enter 2019 “with a strong balance sheet which puts us in an excellent competitive position”.
A number of Kier’s rivals are rushing to shore up their own financial defences, notably Interserve, which is in crunch talks with its lenders over a possible debt-for-equity swap.
When it revealed its rights issue plan Mursell said the move would “de-risk” the contractor, which had built up average month-end net debt of £375m in its last financial year.
At the time Mursell said the rights issue was the correct route for the firm to take in order to raise cash, rather than selling off profitable operations.
Kier’s shares, including the new stock, were trading this morning at 378p, down nearly 2%.