Troubled architect plans to raise 拢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 拢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 拢15.1m into the company鈥檚 coffers 鈥� reduced to 拢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鈥檚 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: 鈥淭he 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.鈥�
The City鈥檚 reaction to the share issue has been muted; at the time of writing, the share price had risen slightly to 8.03p.
No comments yet