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London-listed companies raise £5bn from coronavirus-related share issues


Confirmation of three new fundraisings has brought the total above £5bn of coronavirus-related cash that UK listed companies have drummed up via share issues since the start of March.

On Wednesday Hiscox () pulled in £375mln, the fourth biggest capital raise in the crisis, () attracted £235mln and Immotion () raised £1.35mln.

The combined £611mln took the total already in May to above £730mln and follows April’s 121 share issues totalling £3.3bn, according to London Stock Exchange statistics, with three still to confirm precise details.

In March, 71 early movers raised £1.3bn, with one company still to confirm.

Filtering out minor issues, there have been 106 fundraisings, according to data from AJ Bell, with 33 in March and 65 in April and eight so far in May. 

READ: Listed companies should ‘protect’ smaller investors in coronavirus fundraisings – open letter

“The two key themes from the primary markets in the UK since the COVID-19 outbreak are the dash for cash and the need for speed,” said AJ Bell’s investment director Russ Mould. 

“Not all of the firms that have tapped investors for cash have done so because of the hit their business has taken, but growing numbers of firms are looking to pay down debt or buffer their finances to see them through the lockdown and beyond.

“In many cases, those companies wanted to raise cash quickly so they waived existing shareholders’ so called pre-emption rights (which give them first bite of the cherry at buying the new shares, possibly at a discount) and went for placings where it was pretty much first come, first served.”

Only two FTSE 100 names have been among the total so far, with Informa’s () £1bn the biggest by some way and said to “build stability and strength” after it had to cancel hundreds of events, while Carnival () added US$500mln (£400mln) as the cruise operator looked to retain its buoyancy.

The next biggest was the £536mln from Aston Martin Lagonda (), again part of a rescue arranged before the pandemic hit.

Today’s £375mln pulled in by Hiscox () was one of those where the insurer says it is raising the cash to take advantage of potential opportunities, and the £247mln from ASOS () has led to upgrades from JP Morgan and Jefferies.

It might come as a surprise to some, but on average since the start of March the equity issues have not come at a big discount to their recent share prices, AJ Bell has found, with an offset by some fundraisings priced at a premium. 

The issues in April and May have come at a discount of 12%, with the biggest being the 73% discount from Motif Bio as it raised £0.65mln this week.

Some issues have also been at a premium, with AJ Bell highlighting Loungers () and () both getting their placings away at premiums of 16%, with Faron Pharmaceuticals () drumming up cash at almost 8% higher than its previous closing price.



Read More: London-listed companies raise £5bn from coronavirus-related share issues

2020-05-06 15:19:00

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