Imperial Tobacco today tapped shareholders for £4.9 billion as part of moves to repay debt following the £11 billion purchase of Spanish firm Altadis.
The fully-underwritten rights issue by the Lambert & Butler cigarette maker will offer existing shareholders one new share for every two held. As a result of the push to tackle debt, Imperial Tobacco said it would be able to maintain its investment g
rade credit rating and its dividend policy.
Imperial also reported profits from operations of £918 million for the six months to March 31, an increase of 38% on last time and benefiting from a contribution from Altadis following the acquisition in late January.
However, bottom-line profits reduced to £326 million - a drop of 44% - when restructuring costs and one-off accounting measures are included.
Volumes were 121.1 billion cigarettes - up from 90.7 billion in 2007 due to a combination of organic growth and the contribution of US acquisition Commonwealth Brands and Altadis.
The company increased its share in a number of markets in Europe, particularly in France, Spain and Germany combined with a "robust" performance in the UK.
Chief executive Gareth Davis said it had been a "great start" to the year, with a strong performance from core operations and an encouraging initial contribution from Altadis.
Imperial was among 11 major retailers and tobacco manufacturers named by the Office for Fair Trading in April over allegations of unlawful cigarette pricing practices.
It said at the time that it took compliance with competition law "very seriously and rejects any suggestion that it has acted in any way contrary to the interests of consumers".
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