Severfield-Rowen shareholders have voted in favour of a rights issue to raise £48 million to help reduce its debts.
The steel contractor announced a rights issue at the end of last month after reporting an operating loss of £18.2m in contrast to last year’s profit of £14.2m, with revenue down to £256.6m from £267.8m.
A major factor was an overrun on the contract to build the Leadenhall Street ‘Cheesegrater’ skyscraper in London.
The company has already restructured and said the funds raised through the rights issue will be “used to reduce the group’s outstanding borrowings under the existing facilities and for general corporate purposes”.
The proposal is for 208,252,511 new ordinary shares at an issue price of 23 pence per share, which sees the share price diluted by 70 per cent.
The rights issue was passed at the general meeting today on a show of hands.
They will hit the market at 8am tomorrow (March 19 2013).
Severfield-Rowen’s share price was 72 pence today, which is down 60 per cent on a year ago.