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Pendragon rights issue set to raise £75m for debt repayment

Pendragon plans to raise £75.2 million through a discounted rights issue to reduce its debt and said it would extend the maturity of its borrowing facilities to June 2014.

The 9-for-8 rights issue is at a price of 10 pence per new ordinary share, representing a 54 percent discount to the stock's Wednesday close.

The UK's largest franchised dealer group has also agreed to extend the maturity profile of its borrowing facilities, conditional on the receipt of the proceeds of the rights issue by the lending group.

The company, which in February said it would not pay full-year dividend as it focuses on reducing debt, now plans to resume dividend payments from financial year 2012.

Separately, the company has agreed on a new pension deficit reduction plan which will eliminate the current pension deficit and unlock cash flow savings of 46 million pounds in the period to December 2014.

 

As on December 31, 2010, the company's net debt was 325.5 million pounds.

Pendragon added that trading and outlook for the year is in line with the its expectations.

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