ICI seeks £800m from investors
IMPERIAL Chemical Industries is to tap its shareholders for £800m in an attempt to cut its huge debt. The cash-call wiped 11% off the shares in opening trade, stripping more than £280m from ICI's market value.
The group, the country's largest chemicals maker, also said it would sell its catalyst business Synetix, also using the proceeds to cut borrowings.
The firm's debt stood for the year to end December £2.9bn, despite a string of asset sales in recent years. ICI said its credit risk could be downgraded - raising its borrowing costs - unless it called the rights issue.
'ICI's board believes that the proceeds resulting from the action...will secure a stable BBB/Baa2 rating, and that this will enable the company to achieve debt refinancing, as it is required, on significantly better terms than at a lower credit rating,' it added.
The terms would be unveiled with the group's full-year results on Monday. The stock fell 39p to 332p, valuing ICI at £2.42bn.
ICI added that full-year profits would be around £401m before one-offs, in line with City forecasts, and that the full-year dividend would be 16p a share. That's half its payout in 2000 but in line with ICI's earlier guidance.
The stock has tumbled from peaks of 1200p at the end of 1998, partly on investor concerns about its rising debt. The company, a former icon of corporate Britain, has sought to move away from commodity chemicals to focus on higher value-added specialty chemicals and paints. Analysts value Synetix at around £150m.
