Synthomer, the London-listed chemicals group, is considering raising tens of millions of pounds through a sale of new shares to strengthen its balance sheet.
Sky News has reported that Synthomer, whose stock has plummeted by over 60% in the past year, is collaborating with JP Morgan bankers on the potential fundraising.
Sources in the City mentioned that while a deal is not guaranteed, if it goes through, Synthomer could aim to raise an amount exceeding its current market capitalisation of £90m.
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Alternatively, the company might opt for a smaller sum, as per the sources.
Synthomer, known for producing specialty chemicals used in items like medical gloves, has been impacted by a decrease in demand and is dealing with a significant debt burden.
The company also caters to clients in industries such as coatings, construction, and adhesives.
Based in London, Synthomer has around 3,800 employees.
In a recent trading update, the company stated that «expanded ‘self-help’ cost reduction programs have helped us offset the impact of weaker demand since global tariff adjustments were announced.»
The anticipated equity raise is expected to be part of a broader restructuring of the company’s balance sheet, which may involve renegotiating terms with its lenders.
As of Wednesday afternoon, Synthomer’s shares were trading at approximately 56.4p.
In response to a Sky News article regarding refinancing, Synthomer released a stock exchange announcement stating: «Synthomer plc acknowledges recent media speculation about the potential capital raise.»
«The company confirms that it is currently working with lenders to refinance its existing debt facilities set to mature in H2 2027.»
«As part of this refinancing process, the company is exploring various options to reduce leverage and support the ongoing implementation of its specialty chemicals strategy, including the potential of raising additional capital.»