April 5, 2013 6:13 pm

Severfield-Rowen boosted by fund backing

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Severfield-Rowen’s balance sheet received a much-needed boost on Friday after shareholders in the lossmaking provider of structural steel overwhelmingly backed a £48m emergency fundraising.

The engineer – whose steel can be found in London’s Shard building, the 2012 London Olympic Stadium and the retractable roof over Wimbledon’s centre court – said that more than 93 per cent of shareholders had taken up their rights in the deeply discounted placement.

The rights issue was priced at 23p, a 40 per cent discount to Severfield-Rowen’s theoretical ex-rights price of 37p, and two-thirds lower than the 71.5p price before the move was announced. Two years ago, Severfield-Rowen shares traded above 330p.

The rights issue, which was underwritten by Jefferies, raised a net £44.8m, which the steel provider will combine with existing cash to pay down its £44m net debt and bolster its balance sheet.

Earlier this year, Severfield-Rowen swung to an annual loss of £23m after announcing three profit warnings in as many months.

The company’s finances took a hit of almost £10m after it underquoted in nine contracts including a deal to supply steel to the Cheesegrater, the 225-metre high building designed by Lord Rogers at 122 Leadenhall in the City of London.

The Yorkshire-based company is also without a permanent chief executive after a boardroom coup ousted Tom Haughey in January.

Severfield-Rowen shares edged up 2.5 per cent to 41p, valuing the group’s equity at £120m.

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