Superglass struggles with 1p a share offer

A FURTHER fall in the share price of Stirling-based insulation firm Superglass last week now means more than £120 million has been wiped off the company’s value since it became the biggest flotation in Scotland since Standard Life.

At the time of its debut on the main market in 2007 the firm, which manufactures glass mineral fibre insulation, was valued at £121.6m, compared to Friday’s valuation of £1.23m.

John Smellie, who led a management buy-out and steered the firm through its flotation in 2007 before retiring two years later, has been one of the biggest paper losers from the dramatic fall in share price. Smellie held an 8 per cent stake in the company at flotation, worth some £9.7m. He currently holds 5.29 per cent worth just £65,000.

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Other investors who have seen significant falls in the value of their stakes include Schroder Investment Management, Blackrock and Universities Superannuation Scheme.

Shares in the company dropped to an all-time low last week in the wake of it announcing plans for a 1p-a-share equity issue to raise funds to prevent it breaching banking covenants on its £17.7m of debt. The shares fell as low as 1.75p in response to the news compared to levels of more than 220p seen in the months following its flotation.

In September the company warned it may not be able to meet the terms of its bank facilities if a restructuring did not go ahead. Earlier it had issued a profit warning after an expected sales boost from a government energy efficiency scheme failed to materialise. The company last week said “significant progress” had since been made on the restructuring plans and that equity investors were supportive of a proposed share issue at an indicative price of 1p per share.

Details on the proposed equity issue and the restructuring are expected to be announced shortly.

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