Troubled architect plans to raise £13.3m through an 8p a share offer to existing shareholders

SMC has called on its shareholders to help turn around its declining business.

The troubled architecture group aims to raise £13.3m by making an open offer to shareholders allowing them to buy 19 new shares for every existing five they hold.

This will require shareholders to buy more equity in the company at 8p a share, but will bring £15.1m into the company’s coffers – reduced to £13.3m after expenses.

Although a discounted share issue brings a short term boost in revenue, it can have the long term effect of decreasing the value of the company.

The open offer comes at the tail end of a disastrous year for the architect. Shares plunged from a high of 193p in January to a low of 8p at yesterday’s close, after a string of profit warnings.

The group performed an emergency strategic review in September, and hopes it will now be able to steer itself back towards a strong financial base.

Sir Rodney Walker, executive chairman of SMC, said: “The board believes that the net proceeds of the open offer together with its available facilities will be sufficient for the company to meet its financial obligations as they fall due in the near to mid-term.”

The City’s reaction to the share issue has been muted; at the time of writing, the share price had risen slightly to 8.03p.