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UPDATE 3-Saga cuts 1,400 jobs, former owner to back 150 mln stg capital raise

Thu, 10th Sep 2020 08:20

* Company raises proceeds of 75 mln pounds

* Shares down more than 6%

* Former boss to invest up to 100 mln pounds

* Company says has cut 1,400 jobs
(Adds results of placing, updates share move)

Sept 10 (Reuters) - UK-based over-50s holidays and insurance
specialist Saga launched a 150 million pound ($194
million) capital raising on Thursday that will see former boss
Roger De Haan return as non-executive chairman after the loss of
1,400 jobs.

De Haan, the son of Saga's founder Sidney Isaac De Haan, was
chief executive before Saga was sold in 2004 to private equity
group Charterhouse and will backstop the new fundraising with up
to 100 million pounds ($130 million) of his own money.

"The company I sold was doing brilliantly well. I don't know
what happened...but (it) had certainly lost its way," De Haan
said on a call with reporters.

In a statement hours after the results, Saga said it has
completed the bookbuild process and raised gross proceeds of
about 74.8 million pounds. Bookrunners have placed 623.3 million
new shares at 12 pence a piece with some shareholders, De Haan
and institutional investors.

Saga has taken a hammering from the shutdown of cruises
globally and collapse of other travel this year, worsened by the
company's focus on older customers more at risk from the virus.

On Thursday it reported a first-half pretax loss of 55.5
million pounds versus a profit of 52.6 million pounds a year ago
and suspended its dividend.

Shares in the company dropped 6.4% to 15 pence, down from a
2016 peak of 228 pence.

Saga said it would resume cruises this year, with the tour
operations business expected to restart next April.

The company said as per a second placing, De Haan will
subscribe for 124.2 million new shares. Depending on the extent
of clawback, his stake in Saga will be between 16.6% and 26.4%.

Last week, Saga said it had rejected an unsolicited and
highly conditional 33 pence a share indicative approach for the
company from a consortium of two U.S. financial investors.
($1 = 0.7685 pounds)
(Reporting by Muvija M in Bengaluru and Carolyn Cohn in London;
Editing by Anil D'Silva, Elaine Hardcastle and Toby Chopra)

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