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By Dave Rogers2021-05-13T09:28:00+01:00
Contractor announces promised details of £241m cash call
The final stage of Kier’s plan to be debt free in the next couple of years was announced this morning with the firm telling the City it hopes to raise £241m in new equity by the middle of next month.
Chief executive Andrew Davies said last month that its £436m debt pile could be a thing of the past as proceeds from the equity raise and the £110m sale of its housing arm, Kier Living, which is being bought by a private equity group led by financier Guy Hands, are ploughed into cutting what it owes lenders. The Living sale is due to be completed by the middle of next month ahead of a planned general meeting on 16 June.
Kier has confirmed it will attempt to raise £241m in fresh capital through an equity raise in a move its chief executive has called “the final milestone” of the contractor’s turnaround.
The cash call is marginally above the £190m-£240m range it said it was considering when it first announced plans to issue new shares on 21 April. Proceeds from the equity issue, combined with income from the £110m sale of Kier Living, will help Kier pay down its debt and strengthen its balance sheet, the company said.
Kier’s new shares will be issued at 85p each, a 17 per cent discount on its closing price yesterday of 102.4p. Kier’s total share issuance will more than double from just over 162 million shares to more than 446 million, diluting the existing shareholders by almost two thirds.
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