SVG Capital, which is the largest investor in funds run by Permira, the private equity firm, is raising around £200m from investors at 100p a share. It has cut its commitments to invest with Permira by nearly £800m, to £343.8m, and renegotiated covenants with its lenders.
It has also taken a 40 per cent provision against its investments, cutting net asset value from 847.8p at the end of June to 431p at the end of November. The equity will be raised through a one-for-one rights issue at 100p a share to bring in £139m, and a placing of 60m-70m shares at the same price, to reach a total of approximately £200m. Holders of 48 per cent of the shares have indicated they will take up the rights.
Nicholas Ferguson, chairman, said ??the comprehensive package of measures will provide our shareholders with substantially increased certainty against very turbulent market conditions.?
Asked how long these conditions might persist, he said, ??I haven??t the foggiest idea.? However, he thought that there could be a number of other companies seeking to raise capital in 2009 and felt SVG had to be pro-active in launching its issue early.
SVG has 81.8 per cent of its investment portfolio in Permira funds and products. Following the share issues and banking renegotiations, SVG would have total uncalled commitments of around £350m but cash and undrawn facilities of £770m. Previously its commitments were £1.25bn, higher than the £1bn of cash and other resources it had.
