Debt-laden Kier has dropped out of the FTSE 250 after shares have tumbled following the announcement of plans to raise £264m to pay off debts by selling discounted shares.
The contractor’s shares have slumped nearly 65% from the 52-week high of 11.67p to just 4.08 at the close of trading yesterday.
Investors confidence has taken a turn since Kier reported June year-end net debt stood at £186m, then described as at a controllable level.
Since the financial position has deteriorated with Kier chief Haydn Mursell reporting debt at the end of October up at £624m.
The rights issue is expected to go through on 20 December raising £250m after costs, which will be channelled into reducing debt and easing payments to subcontractors.
Yesterday’s trading saw shares dip below the rights issue price of 4.09p, discounted then by 34% at the time of the announcement last Friday.
While the rights issue has been underwritten by banks HSBC, Santander, Peel Hunt and Citigroup they face buying shares at below the market price.
from Construction Enquirer http://www.constructionenquirer.com/2018/12/06/kier-drops-out-of-ftse-250-as-share-price-dives/
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