Mining group Xstrata today unveiled a massively discounted £4.1 billion rights issue to cut its debts, while engineer Cookson launched a £240 million cash call in an indicator of the depth of the economic downturn.

Cookson is also closing six plants at a worldwide cost of 1250 jobs — including 180 at a plant in Scotland — and scrapping its dividend.

Xstrata today also admitted 2008 profits slumped by 35% to $3.6 billion (£2.5 billion), and debts rose to $16.3 billion. The mining firm is reeling from the global commodities market downturn. Only yesterday, Rio Tinto said it may have to issue new shares to cut debts by $10 billion.

Xstrata is selling new shares in a two-for-one offer at 210p. That marked a 66% discount to the shares' closing price on Wednesday.

It is aiming to reduce its balance-sheet debt to £8.9 billion. Xstrata also announced it was buying Prodeco coal assets in Columbia for £1.4 billion from Glencore, its largest shareholder.

“This rights issue reduces the constraints on the company and aims to put us on a robust footing for a difficult 2009,” said chief executive Mick Davis.

“It should also establish a platform to pursue growth when the economy begins to recover and demand for commodities returns.”

Xstrata's cash call is the latest and largest capital raising by a UK company in recent weeks.

Today, Cookson, which makes 40% of its profits from the recession-hit steel industry, said it was looking to provide a more “suitable” capital structure for the current environment as it launched its 12-for-one rights issue to raise £240 million.

Chief executive Nick Salmon said trading conditions in the first quarter would be no better than the fourth quarter of last year, but were then expected to improve slowly through the second quarter.

Cookson shares dropped 9p to 76p while Xstrata fell 38p to 585p.