LONDON (ShareCast) - (Sharecast News) - Plastic pipes manufacturer Polypipe said on Thursday that it was looking to raise up to ?120m by way of a placing amid a slump in demand due to the Covid-19 pandemic.
Polypipe will use the net proceeds from the placing to strengthen its balance sheet and reduce overall debt, with its chairman, chief executive, chief financial officer and multiple non-executive directors all set to participate in the fundraiser.

The company, which cancelled its 2019 final dividend, said it was operating at roughly 70% below normal demand and had made the decision to furlough around 60% of its workforce.

The FTSE 250-listed firm said: "Polypipe has a strong track record of investment in new product development to drive growth and margin expansion. In recent years, Polypipe has invested between ?20m to ?25m per annum in innovative and exciting product and system launches.

"Rather than having to significantly curtail investment in new product development and capital expenditure and implement further cost reduction measures, all of which may damage the company's long term operational capacity and competitive position, the board has concluded that it is prudent to now raise equity."

Polypipe also said it had entered into an agreement for an additional ?50m revolving credit facility from its primary lender for a period of twelve months - in addition to its existing ?300m facility.

As of 0920 BST, Polypipe shares were down 0.83% at 478p.

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