Imperial To Join Cash Call Club

Source from:  forbes.com Vidya Ram , 05.19.08 05/20/2008

Imperial Tobacco could announce a multi-billion dollar rights issue on Tuesday, following a growing trend among British companies to shore up their balance sheets by tapping shareholders for cash. Imperial Tobacco (nyse: ITY - news - people ) is reportedly planning to ask shareholders for up to ￡5.0 billion ($9.8 billion) on Tuesday, when it releases its interim 2008 results, to help repay a ￡5.4 billion ($10.5 billion) bridge loan before July 18. Last July, Imperial Tobacco had said it would launch a rights issue worth up to ￡5.0 billion ($9.8 billion), in order to maintain its investment-grade credit rating after paying $19.5 billion for Altadis. (See: "Altadis Lights Up Imperial Tobacco's Future") "The size of the rights depends on how far the credit agencies allow Imperial Tobacco to stretch its balance sheet," wrote Dresdner Kleinwort analyst Charles Manso de Zuniga in an investor note, adding that it made sense for Imperial Tobacco to launch the rights issue when announcing its interim r