FRANCE: Pernod Ricard rights issue secures financing until 2013
Pernod said yesterday (15 April) that it would launch the rights issue, which is intended to raise capital in order for the company to pay down debt, largely accrued as a result of its EUR5.3bn purchase of Sweden's Vin & Sprit last year.
The rights issue is set to create 38.8m new shares, representing three new shares for 17 existing shares, at a price of EUR26.70 each.
Despite potentially diluting earnings, the move was viewed largely positively by analysts.
Trevor Stirling, of Sanford Bernstein, said that the rights issue, if successful, would be likely to help satisfy Pernod's refinancing needs until July 2013. Without the issue, Pernod could have faced a financing gap in 2011, he said.
Pernod Ricard, which also yesterday reported a 12% drop in like-for-like sales in its fiscal third quarter, has seen shares rise by nearly 5% today, to EUR42.48 per share.
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