Countrywide rescue bid approved as share price slides lower
Shares in Countrywide plunged more than seven per cent this morning, as the flagging estate agent received the green light for an emergency £140m shareholder cash-call.
Countrywide led the market’s fallers in early morning trading, with shares dropping to 13.96p, having fallen dramatically from their 130p value one year ago.
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However, under-fire chairman Peter Long will be breathing a sigh of relief after the rescue bid received a 98 per cent approval from shareholders.
Today's fundraiser vote comes after a tricky 12 months for the beleaguered estate agent, which has issued two profit warnings in the last year in the wake of growing competition from online entrants to the estate agency market, such as Zoopla and Purplebricks.
Laith Khalaf, senior analyst at Hargreaves Lansdown, said: "Countrywide is back from the brink thanks to a shareholder bailout, though the estate agent is still fighting an uphill battle on a rather slippery slope.
"The injection of £129 million of cash will keep the wheels turning for now, but that money is being used to pay down debt rather than to fund growth. In other words, this cash is a lifeline rather than a springboard."
Countrywide, which owns brands including Bairstow Eves and Gasgoigne Pees, saw its shares tumble more than 60 per cent after calling for the emergency cash fundraiser earlier this month.
However, having raised the £140m pot from investors last week and received shareholder approval today, Countrywide will now be undergoing plans to cut its debt by at least half.
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The UK's largest independent estate agent has also been embroiled in a pay row this month, having drawn anger from investors over a new incentive scheme which would mean cash payouts of over £20m for the beleaguered firm’s top bosses, including Long.