1st Jul 2020 17:29
(Alliance News) - Masonry products firm Forterra PLC on Wednesday outlined plans to raise GBP55 million in a placing to shore up its finances and support its investment plans.
The placing will be conducted via a bookbuild, Forterra noted.
Its shares closed 2.7% higher 206.50 pence each in London on Wednesday.
"The net proceeds from the placing will enable Forterra to maintain a strong balance sheet that can support the group's continued investment programme. Including the completion of a new brick manufacturing facility at Desford in Leicestershire, which is expected to generate attractive returns over the medium term and position the group to benefit from the long-term growth in the housing market," the company said.
"The group expects Desford capital expenditure to consist of GBP30 million in 2020, GBP24 million in 2021, GBP23 million in 2022 and GBP5 million in 2023. Other capital expenditure of GBP5.5 million in 2020 and GBP12 million in 2021 to 2023 is expected."
The company also hopes the funds can allow to "withstand a range of downside scenarios as a consequence of Covid-19".
In a bid to save cash during the pandemic, Forterra has already implemented a 20% board pay cut and initially furloughed 75% of its workforce. At the moment, just 35% are furloughed.
The company added: "Despite the immediate challenges presented by Covid-19, the directors are confident in the long-term market dynamics for Forterra and in its positioning to drive long-term value. Today's announcement is an important step in securing that position for the future benefit of the company's shareholders."
By Eric Cunha; [email protected]
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