SIG to take on CD&R as investor with 150 million pounds equity raise

(Reuters) – SIG Plc (SHI.L) plans to raise 150 million pounds in new capital following a deal that would give U.S. buyout firm Clayton, Dubilier & Rice a 25% stake in the building materials supplier, it said on Friday after reporting “disappointing” results.

The company, which scrapped its dividend and envisaged a 500 million pounds ($617.40 million) hit to 2020 revenue, said March and April revenue declined by 139 million pounds as demand deteriorated due to the coronavirus outbreak.

Sheffield-based SIG also reshuffled its management team with the appointment of polymer products maker Low & Bonar’s Ian Ashton as its new finance chief on Friday. The company named Steve Francis as its CEO in February.

“The prolonged impact of COVID-19 is anticipated to have significant consequences on the group’s financial performance in 2020, both in terms of profitability and cash,” SIG said.

The share sale, backed by its current largest shareholder IKO, will result in Clayton, Dubilier & Rice becoming its biggest investor with two board seats, SIG said.

“The 2019 results, albeit in line with January guidance, are disappointing,” Chairman Andrew Allner said after the company posted a statutory pretax loss of 112.7 million pounds for the year ended 2019, compared with a profit of 10.3 million pounds in 2018.

Reporting by Yadarisa Shabong in Bengaluru; Editing by Shounak Dasgupta

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