Yell moves refinancing on with 660m fundraising

Struggling publisher Yell Group embarked on the last stage of a protracted refinancing yesterday when it announced a &pound;660m share issue, lifting its shares three per cent.<br /><br />Yell plans to issue 1.6bn shares at 42p a-piece, a 12.5 per cent discount to Monday&rsquo;s closing price.<br /><br />Half will be sold through a placing to agreed buyers and half will be sold through an open offer. The plan is subject to approval by the firm&rsquo;s shareholders at an extraordinary meeting on 26 November.<br /><br />The share issue comes after 95 per cent of Yell shareholders recently agreed a refinancing of its &pound;3.8bn debt that was conditional on it raising at least &pound;500m by selling new stock. <br /><br />&ldquo;This is basically taking debt off the agenda,&rdquo; said Yell chief financial officer John Davis.<br /><br />Yell has had to contend with spending cuts by the small businesses on which it depends for classified advertising revenue, as well as increasing online competition.<br /><br />But its second-quarter results were lifted by an unexpected improvement in its UK print operations, which it attributed to greater client confidence and special offers. <br /><br />Revenue for the quarter to end-September fell 15.5 per cent at constant currencies, compared with the company&rsquo;s previous guidance for a 17 per cent fall. <br /><br /><strong>RUPERT HUME-KENDALL</strong><br />Yell is not short of top-flight advisors for its &pound;660m capital raising. JP Morgan Cazenove is acting as joint global co-ordinator and joint bookrunner with both Bank of America Merrill Lynch (BoAML) and Deutsche Bank. HSBC is also joint bookrunner, while JPM Caz and Rothschild are joint sponsors and financial advisers. RBS, Lloyds Banking Group and BNP Paribas are co-lead managers.<br /><br />The BoAML team is lead by its president of International equity capital markets, Rupert Hume-Kendall, and its co-head of corporate broking, Mark Astaire. BoAML has managed over 30 UK fundraisings this year, including rights issues for Lloyds and Informa, and a convertible for WPP.<br /><br />Yell will pay &pound;86m in fees, covering both the debt and equity aspects of the refinancing.<br />