Yahoo Finance Capita rights issue gets 97pc take-up raising £681m
Capita has raised £681m through a rights issue with almost all its investors backing the company's plan to pay down debt and plug its pension deficit.
Capita announced plans to raise £701m through the rights issue in April as part of an ambitious plan to turn the company around.
The issue of one billion new shares at 70p pence each closed on Thursday will over 97pc of shareholders taking up the new shares.
Under the terms of the issue, which had been priced at a heavy discount to Capita’s trading price, shareholders who had two existing shares were entitled to subscribe for three new shares.
The new shares will begin trading on the London Stock Exchange today.
The company’s pre-tax losses had slipped to £513.1m in 2017, from a loss of £89.8m the year before, and it had racked up £1.2bn of debt.
New boss Jon Lewis said he planned to spend £500m in the next three years in order to achieve the company’s targets of having £200m of cash by 2020 and dramatically improving its margins.
He will also focus the company on five sectors, rather than the current 40, as part of a plan to cut costs by £175m. He has warned that putting the business back on an even keel could take up to two years.
Christopher Bamberry, analyst at Peel Hunt, said the move had placed the business on a “sound financial footing” ahead of a “long restructuring process”.
He added: “There is substantial execution risk in delivering a transformation programme of such scale in challenging market conditions. And at this juncture, there is insufficient granularity with regard to the path to achieving the 2020 margin target.”
Shares in the company were trading at 139.1p on Friday morning, 1.98pc higher.
