London-listed specialty chemicals group Synthomer is actively examining plans to raise tens of millions of pounds through a sale of new shares, as the company seeks to strengthen its debt-laden balance sheet. Sky News has learned that Synthomer, which produces chemicals used in products like medical gloves, is working with bankers at JP Morgan on this prospective cash call.
Financial Challenges and Market Performance
Synthomer has faced significant headwinds, with its stock price plummeting by more than 60% over the past year. The company's current market capitalisation stands at just £90 million, and sources indicate that any share sale could aim to raise more than this entire value, though a smaller sum is also under consideration. The downturn in demand, particularly in key sectors, has exacerbated the company's financial strain.
Industry Impact and Company Operations
Synthomer serves a diverse range of customers in sectors including coatings, construction, and adhesives, beyond its medical glove applications. Headquartered in London, the company employs approximately 3,800 people globally. In a recent trading update, Synthomer highlighted that expanded cost reduction programs have helped mitigate the impact of softer end-market demand following global tariff changes.
Strategic Refinancing Efforts
The potential equity raise is expected to be part of a broader reset of Synthomer's balance sheet, which includes renegotiating terms with its lenders. The company's existing debt facilities are due for refinancing in the second half of 2027, and this move aims to reduce leverage and support the sustained delivery of its specialty chemicals strategy.
Market Response and Official Statements
On Wednesday afternoon, Synthomer's shares were trading at about 56.4p. In response to media speculation, the company issued a stock exchange announcement confirming that it is working with lenders to refinance its debt and is considering various options, including raising additional capital, to improve its financial position.
City sources caution that a deal is not guaranteed to proceed, but if it does, it could mark a critical step in Synthomer's efforts to navigate its current challenges. The company's focus remains on leveraging its specialty chemicals expertise while addressing the substantial debt pile that has weighed on its performance.
