Flooring business has £250m wiped off value
Victoria has sought to reassure investors about its financial position after its shares plunged 35% in two days, wiping more than £260m off its market value.
The sell-off began after the floorcoverings group announced plans for a bond issue alongside a warning that its margins are up to 1.5 percentage points below consensus market forecasts.
It is seeking €450m (£400m) in senior secured notes, due 2023, to repay its existing senior bank facility.
This morning Victoria has moved to “address the misleading rumour and speculation surrounding the reasons for the bond and the negative sentiment expressed towards the company, and the consequent fall in price of the company’s ordinary shares since the start of the week”.
Victoria said that its lending banks, HSBC and Barclays, are “very supportive” of its strategy and performance, and are working with them on the planned bond issue.
It set out in more detail the rationale for the method of refinancing, telling investors the bond issue is long-term, fixes interest rates and provides flexibility.
Victoria’s share price troubles date back beyond Monday morning, and have been in decline for two months. It had seen its value reduce by one-quarter from the end of August to Friday’s close, and the precipitous drop this week means the company has lost 53% of its value in just nine weeks.
The Spruce House Partnership, a New York investment firm, has sought to take advantage of the lower share price. It has increased its stake in the business from 7.9% to 12.3%.
