National Grid PLC (LSE:NG.) fell almost 9% after unveiling plans to raise £7 billion to fund infrastructure investment in full-year results.
Some 1,085,448,980 new shares will be issued at 645p each, the network operator announced on Thursday, to raise funds for a £60 billion energy infrastructure investment plan.
“The board unanimously believes this comprehensive financing plan will allow the group to fund a significant increase in capital investment, maintain its strong investment grade credit rating, deliver for customers, and continue to achieve attractive shareholders returns,” National Grid said.
News of the plan sent shares down 8.7% to 1,030p in early trading, with new shares set to be issued at a 34.7% discount to mid-May.
“Understandably, this and the dilution effect of the rights issue have led their share price to plunge, eToro analyst Adam Vettese said.
National Grid was “ordinarily a steady-eddie defensive stock,” he added.
National Grid also reported a pre-tax profit slipped 15% to just over £3 billion, while per-share earnings fell 19% to 60p.