Galliford Try raises £157m to cover AWPR costs
Galliford Try has completed a rights issue to raise £157.6 million of new equity capital to cover over-run costs on the Aberdeen Western Peripheral Route/Balmedie to Tipperty (AWPR) project.
The firm, which was one of three joint venture partners to form the Aberdeen Roads Ltd (ARL) consortium on the £745m AWPR project alongside Balfour Beatty and Carillion, said the latter’s demise increased its total cash commitments on the project by in excess of £150m.
Its half-year results for the end of 2017 also revealed a related £25m exceptional cost.
Galliford Try said the rights issue intends to cover these costs and strengthen the group’s balance sheet.
The one-for-three issue of 27,741,204 new ordinary shares of 50 pence each will raise gross proceeds of £157.6m. The issue price of 568 pence per rights issue share represents a 32.8% discount to yesterday’s ordinary share closing price of 937.5 pence.
The rights issue is fully underwritten by HSBC, Barclays and Peel Hunt.
While it has “sufficient financial resources” to meet its obligations, Galliford Try had previously said this would involve diverting capital away from the Linden Homes and Partnerships & Regeneration businesses, “thereby reducing their ability to capitalise on the material growth opportunities these businesses would otherwise be well positioned to exploit”.
Chief executive Peter Truscott said: “Following the group’s strong financial and operational performance in the first half, with revenue growth across all three of our businesses and excellent progress against our 2021 strategy, we are pleased today to announce the terms of the group’s fully underwritten rights issue.
“We see excellent opportunities and demand for both our private and affordable homes businesses and our Construction business continues to benefit from the current and planned investment in the nation’s infrastructure.
“The rights issue proceeds will strengthen the group’s balance sheet and ensure that the group’s businesses are in a position, with the appropriate capital, to deliver on their respective growth opportunities in line with the group’s stated 2021 strategy.”
Last year Galliford Try revealed that it will no longer bid for major infrastructure projects after its construction division suffered an £89 million loss due to problems on delivering the AWPR and the Queensferry Crossing.