Ashcourt Rowan set for £8.5m cash injection
Share
Ashcourt Rowan has announced that it is to raise £8.5m in cash by offering new shares in the company.
The 8.5m new shares are designed as a cash injection to allow the firm to introduce significant cost reductions, which when fully implemented will allow the firm to make annual savings of £5.2m.
The move is also designed to strengthen the firm’s balance sheet, develop a “best of breed” investment proposition and to create a new operating platform.
As part of the proposals, the company is proposing to undertake a share consolidation. Ordinary shares of £0.002 each will be consolidated into new ordinary shares of £0.20 each. In addition, the company is also proposing a reduction of its share premium account.
Ashcourt Rowan says the principal effect of this will be to place the company in a position where it can lawfully purchase its own shares and/or pay dividends out of distributable profits sooner than it would otherwise be able to do so.
The firm says 59 per cent of shareholders have approved the proposals.
Former Ignis sales and marketing director Jonathan Polin (pictured) was appointed group chief executive of Ashcourt Rowan in August. Polin replaced Mark Cheshire who is stepped down with immediate effect as part of a reshuffle that saw interim chairman Kenneth “Buzz” West promoted to non-executive chairman.
Polin says: “”We are pleased that shareholders are fully behind the Board in its efforts to deliver material and sustainable improvements in the profitability of the Company and appreciate the strong support from existing shareholders and new investors through their participation in the placing which was over
subscribed.”
Ashcourt Rowan reported a £16.8m loss for the year to March 31, 2011, mostly as a result of one-off costs related to the sale of two of its businesses and an £825,000 Financial Services Compensation Scheme levy.
If you enjoyed this article, sign up here to receive daily email updates from Money Marketing and Follow @_moneymarketing
