Mouchel still pondering fundraising options

The group, whose value has dramatically reduced after a 2011 dominated by contract blunders, management resignations, failed takeover bids, tough trading and a banking lifeline, said today it was on course to announce a balance sheet restructuring prior to its year end on July 31.

The company helps build and maintain motorways, roads and schools for local authorities.

Mouchel, which has an office in Leeds, said in March that a significant dilutive equity fundraising was one of the options being considered. It said all of the options being reviewed would result in only limited value for existing shareholders.

Although the environment remains challenging, the actions we are taking will create a platform for long term growth for Mouchel,” Mouchel chief executive Grant Rumbles said.

“The final piece to setting this platform for securing the long term future of the business is to complete the restructure of the balance sheet and we remain on track to announce this.”

The group increased its cost saving target to £21m from £18m and said that its underlying business had performed well despite the company’s recent problems.

Mouchel said it had won £165m of work in its current fiscal year, meaning an increase of £45m since its half year at January 31.

Shares in Mouchel, which rejected a £330m takeover bid from VT Group in 2010 and further bids from Costain and Interserve last year, closed at 5.8 pence on Friday valuing the business at around £6.6m.