Kier has revealed plans to raise £241m by issuing new shares in the business, as it attempts to reduce its net debt.
Kier will issue just over 284m new shares at a price of 85p each – a discount of 17% on the closing price of 102.4p yesterday (12 May).
Kier said the capital raise together with the recent sale of housebuilding arm Kier Living would raise a total of around £351.4m. It intends to use the proceeds from the capital raise to pay more than £200m in assorted debt payments, as well as retaining £16.9m for its cash reserves.
Following the completion of the capital raise, Kier’s lenders have also agreed to extend the group’s debt facilities to January 2025.
Chief executive Andrew Davies: “Today’s proposed capital raise represents the final milestone in the group’s strategy to simplify the group; to improve cash generation; and to strengthen our balance sheet. This capital raise will provide Kier with the financial and operational flexibility to continue to pursue our strategic objectives, within our chosen markets, and to facilitate investment in the business to help drive sustainable, profitable organic growth and the achievement of our medium-term financial targets.”
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I am only a simple person (I must be as I didn’t sell my Kier shares when they were worth something, and I listened to the ‘so called’ clever directors that everything was fine!!!!
It looks to me that the money raised will pay back some of the interest debt that has accumulated??? It intends to retain £16.9M in the cash reserve pot – I wonder if this will be value for money??
I am sure Mr. Davies and the main board have a strategy in place but my wealth was squandered by the previous board and my foolishness in not selling my shares due to misplaced loyalty.