Speedy Hire to raise 100m in rights issue
SHARES in Speedy Hire dropped yesterday after the equipment rental company said it planned a heavily discounted rights issue to reduce debt and strengthen its balance sheet.
The company expects to raise £100m through the sale of 458.7m new shares at 23p each, an 87 per cent discount to the stock’s closing price on Wednesday, in a 9-for-1 rights offering.
“This rights issue will allow Speedy Hire to emerge from the current market conditions in a position of greater strength,” said chairman David Wallis (pictured above).
The rights issue will cut the interest rate Speedy pays on its debt from 4 per cent to 2 per cent above Libor, and reduce the overall debt-pile to £148m, from £248m.
The company said the fully underwritten rights issue would close on 9 July. Shares closed 17.5 per cent lower at 145p.