Cobham turns to rights issue in bid to tackle debt
Cobham is to conduct another £500 million rights issue as part of efforts to pay down its debt pile as losses mount at the struggling aerospace and defence firm.
The group, which has issued a number of recent profit warnings, only embarked on its last emergency rights issue in June, when it raised £506.7 million.
Cobham intends to use the proceeds of the most recent rights issue to pay down borrowings on its revolving credit facilities.
News of the capital raising came as Cobham announced crippling full year pre-tax losses, ballooning from £39.8 million last year to £847.9 million.
The hefty increase is linked to a series of writedowns, including costs linked to its acquisition of Aeroflex in 2014 and an "onerous commercial arrangement" for its KC-46 air-to-air refuelling tanker.
Boss David Lockwood said: "Given the reality of Cobham's current financial performance and our high leverage coming into the year, we have announced actions today to strengthen the balance sheet.
"This is needed to reassure our customers, to give us the flexibility to drive operational improvements and to provide us with a sustainable platform for the future."
The firm has issued five profit warnings in just over a year.
Revenue fell from £2 billion to £1.9 billion in 2015, and chairman Michael Wareing pledged to shake up the board.
"The board and I are deeply disappointed with events through 2016 and the poor outcome that has been delivered.
"While the board has already undergone significant change over recent months, it is my intention to effect a rolling programme of material board changes over the next two years," he said.