Steel firm aims to raise £50m (From York Press)

Severfield Rowen aims to raise £50m

9:09am Thursday 21st February 2013 in Business news

BRITAIN'S biggest structural steel firm could call on shareholders to approve £50 million of fundraising after a contract to build a London skyscraper turned into a multimillon-pound loss.

Last month, Severfield Rowen, of Dalton, near Thirsk, launched an inquiry after warning its profits would be hit by budget overruns on construction of 122 Leadenhall, London, commonly known as the Cheesegrater.

Following the announcement, Tom Haughey was ousted as head of the firm and Severfield's shares lost a third of their value.

Yesterday, it emerged the company is braced for a £10 million hit on the work after overshooting its budget.

The inquiry looked at all of the firm's major works and found eight problem contracts, leading to a warning of a £20 million loss in last year's accounts.

Executive chairman John Dodds said Severfield was being supported by its banks and was looking at an equity-fundraising issue, which would need the backing of its shareholders.

He said: "I am also greatly encouraged by the strong and visible support we have received from our leading shareholders and the constructive discussions we continue to have with our lenders around the longer term financing of the group.”