Inchcape seeks £232m jump start

Car dealership Inchcape is seeking £232 from shareholders in a rights issue that offers new shares at an 88% discount.

The company, which sells top marques including Audi, BMW and Mercedes-Benz from 100 UK retail centres, will use the cash to reduce its £408 million of debt.

This will delay the need to refinance existing bank facilities until the end of 2012 during "extremely challenging" trading conditions, it says.

The recession has already forced it to shed 2,000 jobs and introduce a salary freeze as it braces for a "very weak performance" in the first half of the year.

The firm says it has cut like-for-like costs by 12% after a 19% fall in pre-tax profits to £190.7 million, although including exceptional items the figure more than halved to £108.2 million.

It says: "The board expects that new car sales will continue to decline further in 2009 and not begin to recover until the second half of 2010."

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