Infrastructure firm Mouchel said it is considering a significantly dilutive equity fundraising as it looks to tackle debts and restructure the company this year.
Still recovering from a 2011 dominated by contract blunders, management resignations, failed takeover bids, tough trading and a banking lifeline, Mouchel on Thursday said 2012 would be a year of transition and earmarked annual savings of £18 million.
"All options are being evaluated to address the capital structure of the group, including a significantly dilutive equity raise," a Mouchel statement read on Thursday.
Shares in Mouchel, which rejected a 330 million takeover bid from VT Group in 2010 and further bids from Costain and Interserve last year, were down 28% to 7.75p this morning, valuing the business at just £9.1 million.
The group made an underlying pretax loss of £6.3 million for the six months to end-Jan, down from a £4.1 million profit in the same period a year ago. Net bank borrowings stood at £104.1 million at January 31, an increase of 7.2 million from the same time the previous year.
Mouchel said the group would split into two divisions to focus on core markets; Infrastructure Services, which will run highways work and its Middle East operations; and Business Services, which will run local government outsourcing work.
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