Cobham to raise £512m through rights issue

Aerospace and defence group Cobham confirmed on Tuesday that it plans to raise around £512.4m through a rights issue as it looks to pay down debt.

The 2 for 5 fully underwritten rights issue of 683.1m shares was priced at 75p per share, which represents a discount of 41% to the closing price of 126.8p on Monday.

Cobham announced plans for its second £500m rights issue in less than a year earlier this month, after it sank to a £848m loss for 2016.

Chief executive David Lockwood said: "This rights issue will significantly strengthen Cobham's balance sheet and, together with other actions, will provide us with a sustainable platform for the future. It is the first step in reducing the group's leverage ratio towards the group's target of 1.5x, both reassuring our customers and giving us the flexibility to drive operational improvements.

"Cobham has a portfolio of businesses with leading positions in attractive markets with significant barriers to entry, participation in long-term programmes, a blue-chip customer base and differentiated technologies and know-how. Given these characteristics, the board believes that over the medium term the group will return to positive organic growth and improved profitability with increased conversion of profits into cash."

Cobham also said on Tuesday that its expectations for 2017 remain unchanged.