Countrywide could go cap in hand to investors as soon as this Thursday in a bid to raise £100m.
The Sunday Telegraph yesterday said that bankers were this week finalising the details of the scheme, which EYE flagged up on June 26.
The paper said that Jefferies has been appointed to oversee the fundraising, while investment bank Rothschild will “handle a potential restructuring if the cash call falls flat”.
Countrywide’s plan for a £100m emergency fund-raise was announced last month, when it issued a profits warning, saying that its EBITDA earnings for the first half of this year would be down by £20m on the same period last year, and that it will not be able to recoup the loss in the second half of 2018.
Countrywide is due to announce its first-half results on Thursday, when it now seems likely not just to release details of its fund-raise but to press the button on the placing or rights issue – although the Telegraph does say the timetable could change.
According to the Telegraph, the decision to seek a lifeline from shareholders comes because plans to raise a bond to replace a revolving credit facility with its current lenders proved unsuccessful.
The £100m cash injection is needed to cut Countrywide’s £200m debt.
Countrywide shares, once at a high of 704p, closed on Friday at 51p.
Meanwhile Countrywide’s executive chairman Peter Long is embattled with another crisis – at Royal Mail, where he is also chairman.
Here, 70% of shareholders have rejected its remuneration report – the retiring chief executive is set to receive a payout of £900,000, while the new chief executive will have a basic salary of £640,000, more than that of his predecessor. The company will now have to produce a new pay report.
In addition, just over a third of Royal Mail investors (34.4%) objected to the re-election of Long himself.
This was after Institutional Shareholder Services questioned his ability to devote enough time to Royal Mail, given his other commitments. However, Long stepped down from another chairmanship last week.
How EYE last month reported Countrywide’s decision to try and raise £100m: