Pittencrieff to hive off Texas wing for dollars 50m

SHARES in Pittencrieff, the oil and mobile communications company, jumped 8 per cent yesterday on news that the company plans to split in two.

Pittencrieff wants to issue dollars 50m ( pounds 35m) of new shares in the US, floating off the mobile communications business as an independent operation. The plan is to offer the new shares to the public.

The company said that the growth of Texas-based Pittencrieff Communications Incorporated (PCI) meant it could no longer rely on the oil and gas side for finance.

PCI will also will use part of the proceeds of the share issue to repay loans made by the parent.

When Pittencrieff came to the market in July 1990, communications had a turnover of dollars 30,000 a month. In December last year it had sales of dollars 2m a month. In the same period, turnover in the oil and gas side grew from dollars 460,000 to dollars 620,000.

The company has yet to settle on an exact date for the separation. In the meantime, it made two small acquisitions yesterday.

Francis Communications of El Paso is to be acquired for dollars 6.65m ( pounds 4.7m) for PCI. The parent is also buying oil and gas reserves in the Fort Chadburne field in Texas for dollars 3.75m ( pounds 2.6m).

Both the acquisitions were funded by the placement of 2 million Pittencrieff shares in London. The stock market reacted by marking up the shares 28p to a record 351p.

Pittencrieff has promised to increase the dividend by 17 per cent. The company is set to pay a 4p final making 7p for the year to 31 December.