* To raise net 44.8 mln stg through 7-for-3 rights issue
* Amends revolving credit facility to provide it with 35 mln
* 2012 underlying pretax loss 19.6 mln stg vs pretax profit
10.1 mln stg last yr
* Shares fall as much as 14.7 pct
(Adds analyst comment, details, background; updates share move)
By Brenton Cordeiro
Feb 28 Structural steelwork maker
Severfield-Rowen Plc said it planned a rights issue and
had amended its debt facilities to shore up its finances after
"a very difficult" 2012.
The company, which reported an underlying pretax loss of
19.6 million pounds ($29.7 million) for 2012, said it planned to
raise a net 44.8 million pounds through the 7-for-3 issue.
The issue of up to 208.25 million shares will be priced at
23 pence each, the company said, representing a discount of 67.8
percent to Wednesday's close on the London Stock Exchange. The
company has about 89.25 million shares outstanding, according to
Thomson Reuters data.
Severfield-Rowen shares fell as much as 14.7 percent to 61
pence on Thursday before recovering to be down just 4.9 percent
at 68 pence at 1055 GMT.
The debt refinancing and the rights offering put the company
on much stronger footing and gave it a bit of headroom on its
balance sheet, Peel Hunt analyst Dominic Convey said.
"They've basically dealt with the future investment
requirements as well as short-term balance sheet needs."
The company said it would use the proceeds from the issue to
strengthen its balance sheet. It also amended its revolving
credit facility, which would provide it with 35 million pounds.
The company had net debt of 29.7 million pounds on Dec. 31.
Executive Chairman John Dodds said the loss for the year was
primarily the result of "an unacceptable level of performance on
a small number of contracts."
Severfield-Rowen recorded a pretax profit of 10.1 million
pounds in 2011. Its main business is the designing, fabrication
and erection of structural steelwork for construction projects,
including warehouses, industrial buildings and power stations.
The company said last week that its expectations for 2013
and 2014 were now lower. In January it said Chief Executive Tom
Haughey would step down after cost overruns at one of its
projects in London.
Severfield-Rowen had to cope with lower construction demand,
cost overruns at some projects, pricing pressures and delayed
settlement of contracts.
The company said its order book in the UK stood at 209
million pounds at the end of 2012.
The company has lost about two-thirds of its value in the
past year, leaving it with a market capitalisation of about 64
million pounds as of Wednesday's close.
($1 = 0.66 British pounds)
(Editing by Joyjeet Das)