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Lossmaking UK defence specialist Cobham has added some more detail to its plans to raise extra cash from shareholders, revealing today that the exercise will run to £512.4m, somewhat above earlier estimates.
The company said at the start of this month that it planned to raise £500m in its second rights issue in a year in an effort to slash debts.
CEO David Lockwood says today:
This Rights Issue will significantly strengthen Cobham’s balance sheet and, together with other actions, will provide us with a sustainable platform for the future. It is the first step in reducing the Group’s leverage ratio towards the Group’s target of 1.5x, both reassuring our customers and giving us the flexibility to drive operational improvements.
The Board believes that over the medium term the Group will return to positive organic growth and improved profitability with increased conversion of profits into cash.