Steel group shows its mettle with rights issue

THE parent company of North West structural steel specialist Watson Steel has raised £48m to shore-up its balance sheet.

Severfield-Rowen launched the ights issue to reduce its borrowings in February. The deal has seen 194.5 million new shares issued, raising £47.9m, £44.8m after expenses.

It saw seven new shares issued for every three, priced at 23p, a discount of 67.8% to the closing share price of 71.5p the day before the announcement.

More than 93% of the new shares were taken up by existing shareholders while underwriter Jefferies International will now aim to secure subscribers for the remainder.

The move was announced following operating losses of £18.2m in the year to December 31, compared to profits of £14.2m the previous year.

Revenues for the year were down to £256.6m from £267.8m previously.

Watson Steel, based in Lostock near Bolton, supplies many of the country’s major infrastructure projects, from the London Olympics stadium to the £15bn Crossrail programme.