Pendragon underwriters hit as shares left unsold

 
City A.M. Reporter
A THIRD of car dealer Pendragon’s £75.2m rights issue was left on the books of underwriters as the turbulence in the markets took its toll.

The rights issue was part of a financial restructuring led by chief executive Trevor Finn.

When Pendragon announced the nine-for-eight issue of new shares at 10p a share in mid-July, its share price stood at 21.8p. But in the month since its share price has more than halved. At one stage yesterday they were trading at 10.4p as the underwriters scrambled to place some 243m unsold shares in the market.

Existing shareholders took up 67.7 per cent of the issue.

The underwriters – RBS Hoare Govett, BarCap and Arden Partners – were paid fees of 2.5 per cent, or almost £2m, to cover the issue. That ensures that Pendragon receives the full proceeds, whether or not they place the unsold shares.