Swedish garden and construction tool maker Husqvarna said it would raise around 3 billion crowns ($340 million) in a rights issue as it swung to a bigger-than-expected fourth-quarter loss.
Husqvarna, a maker of garden equipment such as lawnmowers and hedge cutters as well as chainsaws and tools for the building industry, said the rights issue to strengthen its balance sheet was fully guaranteed.
The company's biggest owner, Investor AB said separately it would underwrite up to 1 billion crowns of the rights issue.
Husqvarna reported a pretax loss of 612 million Swedish crowns compared with a year-earlier 94 million profit to come in below the mean forecast for a 551 million loss in a Reuters poll of 11 analysts.
Hit by falling demand, Husqvarna warned in December it would book an operating loss in the quarter, even after excluding 325 million crowns of charges for staff cuts.
The company said on Friday it estimated that retail inventories of its garden products at year-end were “substantially lower” than in the previous year.
“As consumer demand is likely to remain low and retailers are expected to continue to focus on maintaining low inventories, the group expects shipments in the first quarter of 2009 to be substantially lower than in the first quarter of 2008,” it said in a statement. (Reuters)