UK's Cobham to raise more than 500 mln pounds in rights issue

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March 28 (Reuters) - British aerospace and defence electronics company Cobham (Other OTC: CBHMF - news) , which is being investigated by the country's Financial Conduct Authority, said on Tuesday it would raise 512.4 million pounds ($642.6 million) in its latest rights issue.

The 2-for-5 issue of 683.1 million shares was priced at 75 pence per share, a 40.9 percent discount to Monday's closing share price of 126.8 pence.

The company launched the emergency rights issue earlier this month, to shore up its balance sheet after a "deeply disappointing" operating performance in 2016.

"This rights issue will significantly strengthen Cobham's balance sheet and, together with other actions, will provide us with a sustainable platform for the future," Chief Executive David Lockwood said in a statement.

He said it was the first step in reducing the group's net debt leverage ratio towards the group's target of 1.5 times earnings before interest, tax, depreciation and amortisation, "both reassuring our customers and giving us the flexibility to drive operational improvements."

On Monday Cobham said it was being investigated by the UK's Financial Conduct Authority in connection with its handling of inside information ahead of a trading update and announcement of an earlier rights issue in April last year.

Merrill Lynch International and J.P. Morgan Securities plc are acting joint bookrunners and joint underwriters for the rights issue, which is expected to be completed in the second quarter, while Barclays Bank PLC (NYSE: BCS-PA - news) is acting as co-bookrunner and joint underwriter. ($1=0.7974 pounds) (Reporting by Arathy S Nair in Bengaluru; Editing by Mark Potter, Greg Mahlich)