Drax Group PLC (LSE: DRX) announced plans to raise £100 million in a placing to pay down debt and said in a separate trading update that it expects EBITDA for 2009 to be in line with market consensus provided commodity prices stay at current levels.
The operator of the Drax coal-fired power station in North Yorkshire said that for 2010 and beyond, commodity markets currently forecast a sharp recovery in prices and dark green spreads. It has already sold approximately 80 percent of its output for 2010 at higher average margins than for 2009.
Drax is placing up to 25.5 million new ordinary shares, representing approximately 7.5 percent of its existing issued ordinary share capital, through an accelerated bookbuild.
The new funds will be used to pay down debt and help maintain Drax's investment grade debt rating. “Drax believes the placing represents a sensible, prudent and cost-effective means of improving the resilience of its capital structure,” it said.
The company said it remains committed to its longer term strategy of investing in dedicated biomass-fired power generation and continues to be on track to make an investment decision on the first plant before the end of 2010. “At the appropriate time, Drax will seek a financing solution which optimises returns for its shareholders, whilst protecting the investment grade rating on its existing corporate debt,” it added.http://www.proactiveinvestors.co.uk
No comments:
Post a Comment