Speedy Hire to raise 100m in rights issue

SHARES in Speedy Hire dropped yesterday after the equipment rental company said it planned a heavily discounted rights issue to reduce debt and strengthen its balance sheet.<br /><br />The company expects to raise &pound;100m through the sale of 458.7m new shares at 23p each, an 87 per cent discount to the stock&rsquo;s closing price on Wednesday, in a 9-for-1 rights offering.<br /><br />&ldquo;This rights issue will allow Speedy Hire to emerge from the current market conditions in a position of greater strength,&rdquo; said chairman David Wallis (pictured above).<br /><br />The rights issue will cut the interest rate Speedy pays on its debt from 4 per cent to 2 per cent above Libor, and reduce the overall debt-pile to &pound;148m, from &pound;248m.<br /><br />The company said the fully underwritten rights issue would close on 9 July. Shares closed 17.5 per cent lower at 145p.