Struggling infrastructure group Mouchel has lost nearly a third of its remaining value after it warned a proposed restructuring would leave very little value for shareholders.
The company, which rejected a number of takeover approaches over the past two years before being hit by contract problems, said it hoped to announce a balance sheet restructuring before the end of July. It had already said in March that an equity fundraising was one possible outcome but confirmed:
All options being considered will result in there being only limited value for shareholders.
So its shares have slumped 1.7p to just 4.1p, despite the company adding that its underlying business was performing well and it had identified an extra £3m of overhead cost savings. Analyst Christopher Bamberry at Peel Hunt said:
With only limited value for existing shareholders, Mouchel remains a sell. However post restructuring it should generate sensible returns. Once the balance sheet is restructured, it should be a much more interesting investment proposition.
