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Financials

Asset manager Invesco warns UK firms over cash calls - Sky

LONDON, April 8 (Reuters) - Asset manager Invesco has warned the boards of some of Britain’s biggest companies they need a “strong rationale” to secure its support for cash calls to shore up operations hit by the coronavirus, Sky News reported on Wednesday.

In a letter written to around 200 companies, the co-heads of UK equities, Mark Barnett and Martin Walker, said equity was “precious and expensive” and that companies should make use of government financing schemes first.

“In these times of unprecedented uncertainty and volatility, we have analysed financial statements focussing on cash flow, liquidity and debt maturities in order to take a view on whether the company will be required to raise capital to strengthen its balance sheet and ensure its future viability,” they wrote.

“However, current market valuations mean that equity is both precious and expensive and should the company be required to raise short term capital we would strongly advise you to examine any alternatives structures or facilities that may be available, for example, the COVID corporate financing facility (CCFF) or similar facilities.”

A spokeswoman for Invesco confirmed the letter had been sent but declined to supply a copy to Reuters. (Reporting by Simon Jessop; editing by Sinead Cruise)

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