Shares of Doncaster-based plastic piping and ventilation systems firm Polypipe Group fell about 11% on Thursday after it issued a COVID-19 trading update and said it raised £120 million by selling shares in a placing.

On current trading, Polypipe said: “The group has been operating at approximately 70% below normal demand, supplied mainly from existing stock, driven by urgent NHS and care-related activity as well as some ongoing infrastructure and commercial work, and essential Repair, Maintenance, and Improvement (RMI).”

On the £120 million sale of shares, Polypipe said: “The net proceeds of the placing will be used to strengthen Polypipe’s balance sheet, reduce overall debt and lower leverage, and ensure that the group does not breach covenants in a prudent scenario or require further waivers that may or may not be forthcoming.”

The Doncaster firm added: “A total of 26,966,300 new ordinary shares in the capital of the company have been placed by  Deutsche Bank AG, London Branch and Numis Securities Limited acting as joint bookrunners, raising gross proceeds of approximately £120.0 million.

“The placing shares have been issued at a price of 445 pence per placing share.

“The placing shares being issued represent, in aggregate, approximately 13.4 per cent. of Polypipe’s issued ordinary share capital prior to the placing.

“The placing price of 445 pence represents a 7.7 per cent. discount to the closing mid-market share price of 482 pence on 6 May 2020, and a 3.1 per cent. discount to the middle market price at which time the company and joint bookrunners agreed the placing price.”