Informa, the business-to-business publishing giant, has asked its shareholders for an extra £242m in funding to help it chip away at its debt levels.
The Lloyd’s List publisher also announced plans today to move its parent company operations to Switzerland to avoid paying UK corporation tax.
In a trading update, Informa said revenues from its publishing business continued to grow in the first three months of 2009 compared with the same period last year, despite an economic environment that shows no signs of improvement.
Revenue from events was also said to be marginally ahead of the first quarter of 2008.
But Informa said it needed more “headroom” to make sure it stayed within its lending agreements with the banks.
It is now asking shareholders to buy an extra two shares for every five they already own, at a discounted price of 150p each
Two investment banks, Merrill Lynch and RBS Hoare Govett, have agreed to buy any unwanted shares.
Informa chief executive Peter Rigby said asking shareholders for more cash was a better option than selling off some of the company’s assets, because they would be unlikely to fetch a suitable price in the current climate.
“Any asset sales will likely be at depressed prices,” he said. “It is the judgement of the board to avoid selling quality assets at the prices it believes it would currently obtain.”
Informa is proposing a new structure to the business that will see it remain listed in the UK but incorporated in Jersey and tax resident in Switzerland.
The company said proposed changes to UK tax law, due to take effect on 1 July, would have had a “detrimental impact”.
It said Switzerland was “the most appropriate location” because it had a “less complex taxation system” and was “a highly stable political and economic environment”.
Last year, another business-to-business publisher, United Business Media, moved its tax residency from the UK to Ireland.
The London stock exchange welcomed Informa’s announcement this morning. Shares in the publisher were up 12.6 per cent to 334.75p by 9am.