SVG plunges on £200m on rights issue
INVESTMENT group SVG Capital launched a deeply discounted £200 million cash call yesterday and warned the value of its investments had plummeted by 40 per cent in the past six months.
The company also said it had cut investment plans from £1.15 billion to £350 million for next year and had persuaded its banks to relax their convenants on group debt.
SVG mainly puts money in funds run by private equity giant Permira, whose investments include the AA, Saga and Birds Eye.
FIND OUT HOW YOUR SHARES ARE DOING
SVG’s shares tumbled 663⁄4p to 1151⁄4p as it announced plans to issue one new share for every existing share at a price of 100p, a 45 per cent discount on Wednesday’s closing price.
The company said the moves were designed to protect its finances in the face of the ever-deepening recession and underlines the problems facing private equity firms.
They are finding it difficult and expensive to raise debt to make new investments, and are struggling to sell existing investments.
One group, 3i, has seen its shares plunge this week on fears about the value of its investments.
