Third rights issue in three years for BTP

Shares in BTP, the speciality chemicals group, fell by 12p to 260p yesterday as the company announced its third rights issue in three years. The company is raising £52m via a one-for-six rights issue priced at 225p per share in order to reduce bor rowings and fund a programme of acquisitions.

John Kettley, chairman, who took the helm in December when Frank Buckley stepped down, said the new funds would eliminate the group's £49m debts and keep gearing beneath 30 per cent.

BTP also announced yesterday the £3.5m acquisition of a production facility which makes raw materials for cosmetics. The deal marks another stage in the group's strategy of making bolt-on acquisitions as larger chemicals groups shed peripheral businesses.

BTP has now spent £20m on six acquisitions since it bought the assets of MTM in June 1993.

Commenting on the fund-raising, Mr Kettley said: "This puts us in a good position to maintain our acquisition strategy. We can pick up speciality producers, put them into our existing businesses and share the overheads."

He added that BTP was considering other purchases that could involve a total of £30m. "We have a wish list of companies we are interested in but we will have to wait and see what comes to fruition," he said.

Mr Kettley said trading had been encouraging since the company's interim results in December. Price increases had been successfully pushed through as a result of increased raw material prices and demand was encouraging.

In December, BTP said its adhesives and textiles coatings division, which was hardest hit by recession, saw operating profits improve, with biocides and fine chemicals also performing strongly The company said that it expected to recommend an increased final dividend of 7.15p per share for the year to 31 March, compared with last year's 6.55p.