DIY chain Wickes’ parent company, builders’ merchant Travis Perkins, has secured a rights issue to raise £300m.
The company has revealed it secured a fully underwritten 7 for 10 rights issue, through the issue of nearly 86 million new shares.
It has raised gross proceeds of around £314m (around £300m net of expenses). New Shares were priced at 365p – a 51.6 per cent discount to the closing price of 753.5p per share on May 8, 2009.
The company aims to reduce the group’s net debt and “substantially increase financial headroom”, improve the group’s trading position through the recession, increase the flexibility of the group to operate and invest in its core businesses, strengthen the group’s competitive and strategic position to allow it to exploit the recovery potential in its markets and expand as conditions improve, and enhance the group’s future access to, and lower the costs of, sources of capital.
Travis Perkins said its overall financial perfomance for the year to date is ahead of board expectations. Its DIY chain Wickes had a “successful” Easter period, with like-for-like sales growth in March and April up 2.9 per cent. In the 18 weeks to May 2, 2009, like-for-likes fell 6.5 per cent, while it made “significant gains” in kitchen and bathroom revenue, with like-for-like sales up 12.5 per cent.
Travis Perkins has suffered in the wake of the collapsing property market and is burdened by debt of £1bn.
Earlier this month electricals retailer DSGi raised £311m to accelerate its turnaround plans after credit insurance difficulties led to a sharp rise in debt.