(Alliance News) - Kier Group PLC on Thursday said it plans to issue GBP241 million worth of shares priced at 85 pence each in an accelerated bookbuild, the "final milestone" in its turnaround strategy.
Shares in Kier were up 8.9% to 111.46p in London.
Most of the cash will be used to cut debt, Kier said, while GBP16.9 million will be added to the company's cash reserves. Together with the GBP110 million sale of the Kier Living housebuilding unit announced on April 16, the proceeds will provide financial and operational flexibility, the company said.
Kier's lenders have agreed to extend its debt facilities to January 2025 following the capital raise, providing further balance sheet strength as it targets a net cash position within two to three years, the company said.
The infrastructure services and construction company has been offloading businesses and paying down debt after years of financial troubles. This saw its share price plunge by more than 90% since the beginning of 2017.
The 85p per share issue price is a 17% discount to Kier's closing price on Wednesday of 103.00p, and the placing has been fully underwritten by Numis Corp PLC and Peel Hunt LLP.
"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," Chief Executive Andrew Davies said.
By Ivan Edwards; ivanedwards@alliancenews.com
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Kier (KIE)