Companies urged to issue shares to refinance

Companies urged to issue shares to refinance

UK finance directors are increasingly advising their companies to issue shares as a way of raising capital because debt-rating agencies are using tougher guidelines following the collapse of Enron.

As the agencies become stricter companies with large debts face being downgraded and struggle to borrow or find their bonds losing value, leaving finance directors with few options but to issue more shares to raise cash.

Last week, researchers at investment bank Goldman Sachs said the debt rating agencies are actively reviewing their corporate rating procedures.

Chemicals giant ICI last week issued £800m of new shares at a 45% discount to alleviate its £3bn debt. Evidence suggests other UK companies whose balance sheets need repairing will attempt to reduce debts by raising capital in the same way.

Share

Subscribe to get your daily business insights

Resources & Whitepapers

Why Professional Services Firms Should Ditch Folders and Embrace Metadata
Professional Services

Why Professional Services Firms Should Ditch Folders and Embrace Metadata

3y

Why Professional Services Firms Should Ditch Folde...

In the past decade, the professional services industry has transformed significantly. Digital disruptions, increased competition, and changing market ...

View resource
2 Vital keys to Remaining Competitive for Professional Services Firms

2 Vital keys to Remaining Competitive for Professional Services Firms

3y

2 Vital keys to Remaining Competitive for Professi...

In recent months, professional services firms are facing more pressure than ever to deliver value to clients. Often, clients look at the firms own inf...

View resource
Turn Accounts Payable into a value-engine
Accounting Firms

Turn Accounts Payable into a value-engine

3y

Turn Accounts Payable into a value-engine

In a world of instant results and automated workloads, the potential for AP to drive insights and transform results is enormous. But, if you’re still ...

View resource
Digital Links: A guide to MTD in 2021
Making Tax Digital

Digital Links: A guide to MTD in 2021

3y

Digital Links: A guide to MTD in 2021

The first phase of Making Tax Digital (MTD) saw the requirement for the digital submission of the VAT Return using compliant software. That’s now behi...

View resource