Speedy Hire to cut debt with £100m rights issue

Speedy Hire has announced a rights issue that will raise £100m. The money will be used to reduce the group’s debt.

Yesterday the plant hire group announced annual results showing a pre-tax loss of £71m .

Existing shareholders are being offered one new share for ever nine shares they currently hold.

The move will keep the hire firm’s printer busy as it will call for the creation of 460m new shares.

Shares are being offered at a price of 23p.

David Wallis, chairman of Speedy Hire, said: “The rights issue will strengthen the group’s balance sheet.

“By reducing leverage we will have greater operational flexibility to trade through uncertain economic conditions.

“Combined with the recently announced covenant amendments and amended bank facility agreement this rights issue will allow Speedy Hire to emerge from the current market conditions in a position of greater strength.”
 
The price of 23p represents a 39% discount to the open market share price on 31 March 2009 and an 86% discount to the closing price of 176p on the trading price of shares on 27 May 2009, the last business day prior to this announcement.