Bank underwriters are set for losses as Kier’s £250m rights issue fails to captivate the market with just over a third of shares taken up
Kier Group shares were trading at 385p yesterday (19 December), below the 409p rights issue price.
Kier offered investors a 33 for 50 rights issue of 64,455,707 new shares at 409p per new share. When the offer was announced on 30 November 2018, its shares were trading at 752p. After the announcement, the share price tanked to 376p. It closed at 414p.
The company has revealed it received 24,276,286 new shares, representing 37.66% of the total number of new shares to be issued in accordance with the fully underwritten Rights Issue.
The rights issue was fully underwritten by Numis Securities, Peel Hunt, Citigroup Global Markets, HSBC Bank and Banco Santander. The underwriters must now take on the remainder.
Kier will receive the £250m net cash proceeds of the Rights Issue by 28 December 2018.
Haydn Mursell, Chief Executive of Kier Group plc, said: “Following the completion of the £250m rights issue, Kier enters 2019 with a strong balance sheet which puts us in an excellent competitive position.”