Black Country engineering group Hampson Industries has revealed plans to raise almost £60 million through a share offer.

The aerospace firm, which is saddled with debts of £146.3 million, plans to generate £59.5 million – or about £55.6 million net of expenses – by issuing more than 119 million new shares at an issue price of 50p.

The company said the move was designed to reduce its net borrowings and provide a more robust and flexible funding structure to allow it to grow.

The move came after the Brierley Hill-based group said its principle business, aerospace tooling, has continued to see early signs of the anticipated recovery of market demand. Its 12-month tooling order book on December 31 had increased by 13 per cent in nine months.

Referring to the capital raising, which is fully underwritten by Investec and Lloyds TSB Corporate Markets, non-executive chairman Christopher Geoghegan said it will give the firm flexibility to exploit more opportunities.

He added: “In light of the recent challenging trading environment, we have taken, and continue to take, rapid and decisive actions to reduce the Group’s cost base and improve operational efficiency.

“With a stronger financial platform, the directors believe that the group will be well-positioned to benefit from the anticipated recovery in aerospace tooling demand, and the board remains confident in the group’s medium and long-term prospects.”