Pendragon launches £75m cash call

Car dealership group Pendragon is looking to reduce is debts through a £75 million rights issue.

Money raised from the issue of new shares will help the firm shore up its finances. Securing the funds is a condition set by the banks that must be fulfilled before they agree on a three-year loan.

The company is based in Nottingham and operates more than 300 dealerships around the UK under the Evans Halshaw and Stratstone brands.

It posted underlying pre-tax profits of £9 million for the five months to May 31 - up £1.1 million from the same period last year.

Pendragon markets cars from manufacturers including Ford, Vauxhall and Fiat, as well as luxury brands such as Mercedes Benz and Maserati through its Stratstone dealership

The premium car division is planning to unveil new models this autumn and Pendragon said the timing issues related to this had affected its performance.

Commenting on the latest cash call, chairman Mike Davies said it signified "an important step in the evolution of Pendragon".

Copyright © Press Association 2011