Speedy to raise €115 with rights issue

Speedy Hire in the UK has announced a fully underwritten rights issue to raise approximately £100 million (€115 million) through the issuing of 458.6 million shares at £0.23 (€0.26), equivalent to an 86% discount on the £1.76 (€2.02) closing price on 27 May.

Speedy said the funds would be used to strengthen its balance sheet, provide financial and operational flexibility in case markets continue to deteriorate, give it the financial strength to consolidate and extend its market position, and allow it to emerge from the recession in a stronger position.

The rights issue is subject to the approval of shareholders at a meeting on 24 June.

David Wallis, chairman of Speedy Hire, said: "The Rights Issue will strengthen the Group's balance sheet during an unprecedented period of challenging trading and limited visibility over future revenue streams. By reducing leverage we will have greater operational and financial 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 company announced its results for the year on Tuesday 26 May (see link to the story on this page).