Steel fabricator Severfield Rowen has announced a £47.9M rights issue to reduce its outstanding borrowings.
The firm has been forced into raising the money after it announced it had lost £10M on its Leadenhall building “Cheesegrater” contract along with losses of £10M across another eight unnamed contracts.
“Today’s rights issue puts Severfield Rowen on to a sound financial footing,” said Severfield’s executive chairman John Dodds.
“The events led to the rights issue related to an unacceptable level of performance on a small number of contracts. It is extremely encouraging that our shareholders, our lenders and our clients have shown strong support for the business, endorsing the Group’s market leadership, longevity and underlying potential,” said Severfield’s executive chairman John Dodds.
The firm also announced an operating loss of £18.2M for 2012.