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Shanks sees strong take up on 71m rights issue

SHANKS Group, the UK&rsquo;s largest waste management firm, said yesterday that take up for its recent &pound;71.4m rights issue was over 95 per cent.<br /><br />The firm said on 21 May it had issued 158.7m shares at a price of 45p a share, a discount of 50.8 per cent to the stock market closing price the day before. The rights issue was fully underwritten by sole bookrunner RBS Hoare Govett.<br /><br />Shanks plans to use the proceeds to reduce its net debt to cushion it in the event of a more serious downturn in the economy and to provide headroom under its new banking covenants.<br /><br />Chief executive Tom Drury also said the fundraising would bolster its reserves to invest in opportunities in the downturn, focusing on the recycling, organic processing and UK private finance initiative sectors.<br /><br />&ldquo;There is a limited window for Shanks to take advantage of these opportunities,&rdquo; he said.