Capita shares rebase after rights issue begins

Capita’s share price has fallen 38% after the firm admitted more than one billion shares to the London Stock Exchange.

The troubled outsourcer initiated its planned £701m rights issue, listing 1,001,032,281 new shares on Thursday.

At an issue price of 70p, the new shares represent a discount of 60% to the firm’s previous closing price of 200p.

As announced in its final results, Capita shareholders were today able to buy three discounted shares for every two they hold.

Following the issuance of more shares, the FTSE 250 firm’s share price opened 38% lower at 124p. However, after factoring in the value of nil paid shares, Capita’s shares are up 5% on a like-for-like basis.

Although markets reacted harshly to the firm’s announcement it would need to raise more capital to tackle its cash woes in January, sending its shares plummeting more than 40%, the firm’s share price rallied when details of its 3-for-2 rights issue emerged in April.

The firm has previously stated it expects underlying profits for 2018 to be somewhere between £270m and £330m.

The rights issue was also overwhelmingly approved by shareholders during the group’s AGM on Wednesday, with 99.51% in favour of the proposal.

Capita’s woes have weighed heavily on major shareholders Neil Woodford and Invesco Perpetual head of UK equities, Mark Barnett. Year-to-date its shares are down 68%.

Woodford Investment Management has a 10% stake in the FTSE 250 outsourcer, while Barnett’s firm is the fourth largest shareholder with a 9.08% stake.

Veritas Asset Management is currently the largest shareholder, owning 13.34% of the business.

Investec Asset Management also features among the top shareholders and currently has a 9.45% stake in the firm.

 

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