London-listed security services firm G4S is seeking to raise several hundred million pounds by offering new shares for debt reduction and investment purposes.
The company said that it plans to raise £600m ($932m, €698m) by selling 140.9 million new ordinary shares or 25 pence each. The share placing with existing shareholders and new institutional investors will increase the company's equity capital by about 10%.
Citigroup Global Markets, JPMorgan Securities and Barclays Bank will act as joint bookrunners in the share placing.
Invesco Asset Management will take part in the deal and buy shares in proportion to its existing 14.85% shareholding in G4S.
"The Board believes that this equity issue will strengthen the balance sheet of the Company and provide a strong foundation to help deliver sustainable, profitable growth," the company said in a stock exchange filing.
G4S, the world's largest security services firm, had suffered a blow to its reputation after failing to adequately staff the 2012 Olympic Games in London. Furthermore, an audit in July found that the company had overcharged the government on its contract to carry out the electronic tagging of criminals in England and Wales.
In June, the company promoted its finance chief Ashley Almanza to the post of CEO. Since his appointment, Almanza has been undertaking a "business and strategy review" of the group.
While G4S is yet to complete the review, it stressed on the need to repair its debt-laden balance sheet. As at 30 June, the company's net debt was 3.2 times earnings before interest, taxes, depreciation and amortisation.
The company noted that the share sale is part of its plan to "provide greater flexibility to invest in the business and to reduce the risk of a credit downgrade".
It also agreed to sell its Canadian Cash and Colombia Data businesses for total proceeds of about £100m, and projects to raise a further £150m from disposals including the sale of the US Government Solutions business and the regulated secure solutions business.
The company wants to expand in the fast-growth markets of Asia, Africa and Latin America.
"G4S has excellent market positions, particularly in developing markets and as a result of which we have very material growth opportunities," Almanza said.
G4S shares gained following the news. As at 11:48am BST, the shares are trading at 253.5 pence, up 3.34%.