Provident Financial rights issue closes with 96pc acceptance

Provident Financial announced on Tuesday that the 17-for-24 rights issue of 104,998,904 new ordinary shares at 20 8/11 pence each, as announced on 27 February, closed for acceptances at 1100 BST on Monday.

The FTSE 250 firm said it received valid acceptances in respect of 101,077,875 new ordinary shares, representing approximately 96.3% of the total number of new ordinary shares to be issued under the fully-underwritten rights issue.

It said it expected that the new ordinary shares in uncertificated form would be credited to CREST accounts “as soon as practicable” after 0800 BST on Tuesday, and that the definitive share certificates in respect of new ordinary shares in certificated form would be dispatched to shareholders no later than 17 April.

Provident said it also expected that the new ordinary shares would commence trading, fully paid, on the London Stock Exchange main market for listed securities on Tuesday.

“In accordance with their obligations as joint global coordinators in respect of the rights issue pursuant to the underwriting agreement, Barclays Bank and J.P. Morgan Securities will endeavour to procure subscribers for the remaining 3,921,029 new ordinary shares not validly taken up in the rights issue,” Provident’s board explained in its statement.

“[Failing that], Barclays and J.P. Morgan Securities as underwriters have agreed to acquire, on a several basis, any remaining new ordinary shares.”

A note from Shore Capital analyst Gary Greenwood added some colour, having caught up with chief financial officer Andrew Fisher and his financial controller Gary Thompson the day before, picking up an "encouraging" tone with the company "able to move forward with more confidence" following the recent £331m rights issue.

"Of the circa £100m of money raised to bolster the balance sheet, around half relates to increased operational risk and half to increased conduct risk," the analyst wrote.

"It is possible that this additional capital requirement could reduce over time if the group is able to demonstrate improvements in managing these risks," he added, noting that a reduction in capital is not factored into management guidance or his own forecasts.