De La Rue is halting production of banknotes and UK passports at its plant in north-east England after it lost the contract for the post-Brexit documents to the Franco-Dutch company Gemalto. The move threatens about 260 jobs at the Gateshead plant – which has made the UK’s passports for the past decade – and comes as the company announced plans to raise £100m from investors as part of a turnaround plan to shift its focus to plastic banknotes. The company said it expected production of banknotes at Gateshead to stop by the end of December. It added: “The UK passport operations, also in Gateshead, will cease during the first half of 2020-21 as the contract transfers to a new supplier.” It plans to keep some core services and roles at the site. The loss of the British passport contract, as well as two profit warnings in 2019 and ballooning debt, prompted De La Rue to warn late last year of uncertainty over the business’s future. However, the chief executive, Clive Vacher, said those concerns would be dispelled by the fundraising, which must be approved by shareholders at a meeting on 6 July. The move will leave De La Rue, which will design and print next year’s new £50 note, with four currency sites worldwide. Analysts at JP Morgan welcomed the fundraising plan and said the Covid-19 pandemic might accelerate a shift from paper to plastic banknotes due to hygiene concerns. , said the health crisis might also lead countries to replace notes more frequently. De La Rue shares rose around 5% on the news. The 189-year-old company said annual operating profit fell 61% to £23m for the year to 30 March, hit by a fall in currency volumes and the loss of sanctions-hit Venezuela as a customer. Vacher conceded in February that “considerable” work was needed at the firm, while unveiling plans to boost profitability by reining in costs and investing in polymer notes. “We are now well under way with our plans to turn around the company,” he said on Wednesday. The fundraising announcement comes a day after the Serious Fraud Office said it was dropping a corruption investigation into the company’s activities in South Sudan.