Paragon warns of collapse

Paragon warns of collapse as financing woes hit share price.

One of Britain’s biggest buy-to-let lenders warned shareholders yesterday that it could collapse if it failed to raise an extra £280 million, prompting fears of a knock-on blow to the housing market.

Christine Seib and James Rossiter, The Times - 23 November 2007

Trading in Paragon shares was suspended yesterday morning after they plummeted by more than 50 per cent to 100p on the news that the lender needed to raise cash via a rights issue after the credit crunch had made borrowing from other banks too expensive.

The stock closed down almost 39 per cent to 125p.

If the rights issue does not go ahead and it cannot raise money elsewhere, Paragon said that there was “significant doubt” about the company’s ability to continue as a going concern - full article