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ICI board approves rights issue

A rights issue to ease chemicals firm ICI“s growing debt mountain was approved at an extraordinary general meeting on 27 February. The board of ICI, which employs about 1,000 staff at operations on T…

A rights issue to ease chemicals firm ICI“s growing debt mountain was approved at an extraordinary general meeting on 27 February. The board of ICI, which employs about 1,000 staff at operations on Teesside, voted overwhelmingly in favour of increasing the share capital of the business. Earlier this month, the firm announced the GBP 808 million rights issue to help put the business back on a sound financial footing. It also posted out provisional allotment letters in respect of entitlements to new ICI shares. Trading in the shares was due to start today. The rights issue has seen ICI issue 463.3 million shares at the discounted price of 180p, from the closing price of 3281/2p on 22 February. It is offering qualifying shareholders seven new ICI shares for every 11 existing shares they hold. Shareholders will have until 9.30 am on Wednesday, 20 March, to accept and pay for the new shares. A spokesman for ICI said: “The resolution to increase the authorized share capital of the company was passed with more than 99% of the votes cast in favour. “Provisional allotment letters in respect of entitlements to new ICI shares have been posted to all qualifying shareholders.” ICI has debts of GBP 2.9 billion after transforming itself from a high volume chemicals firm into a global speciality products and paints business. The repositioning of the group has left a workforce of 7,000 UK staff, from 40,000, at sites in Middlesbrough, Slough, High Wycombe and Ashford. As part of the transformation process, ICI put its catalyst business Synetix, based in Billingham, on the market at the start of this month. That business employs about 800, including 400 on Teesside, and has 5,000 customers in 85 countries. Once that business is sold, the ICI workforce on Teesside will number just 600, a far cry from the 30,000 it employed in its Teesside heyday of the 1960s. The majority of those will be at surfacants business Uniqema, with others in research and technology operations. ICI chairman Lord Trotman said the rights issue was necessary to help cut debts that had arisen from ICI“s recent three-year transformation programme. That included the disposal of its bulk chemicals business to the Huntsman Corporation of the US. In December, ICI agreed to sell its remaining 30% shareholding in Huntsman International Holdings to the US corporation, but it will have to wait until 2003 before it sees any of the cash from the sale.

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