Serco unveils £170M emergency cash plans as CFO exits
Outsourcing giant Serco on Wednesday unveiled plans to raise £170 million in emergency cash, alongside the announcement of the departure of its chief financial officer (CFO) Andrew Jenner.
Serco said in a statement that it would issue nearly 50 million new shares to raise the emergency cash. The new shares will represent slightly less than 10 per of the group's existing share capital.
Announcing the plans, Serco CEO Rupert Soames said, "The proposed equity placing has a single purpose: to give us the opportunity to conduct a thorough review of the strategy of the business whilst remaining within the terms of our debt facilities."
Soames acknowledged that the group's performance had been weaker than their expectations and that the year ahead would be more difficult, but he added that the new strategy would provide the group with a clear path to rebuild its future.
The announcement of emergency fund raising plans was not a surprise as the group had warned earlier this week that it could issue new shares to strengthen its balance sheet. In addition, the groups had warned that could downgrade its profit forecasts for 2014 because of challenging business conditions.
In the most recent statement, the group also announced the exit of CFO Jenner, who will leave the group once a successor is appointed. He has been the group's chief financial officer for around twelve years.
Serco shares shed 1.08 per cent to close at just north of £3.40 apiece on Wednesday.