BTG raises 10m pounds to cut debt and fund two purchases

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BUSINESS Technology Group, the office services company formerly run by Tony Berry of Blue Arrow, is raising pounds 10m to reduce debt and make two acquisitions, writes Robert Cole.

It is paying pounds 8.3m in cash and shares for Captain Cargo, a parcel deliverer, and pounds 1.5m for Photostatic, a photocopier distributor. Captain Cargo made profits of pounds 1.3m on sales of pounds 15.1m last year and Photostatic's profits were pounds 51,000. After the placing and open offer, the group's debt will fall from pounds 4m to pounds 2.5m.

It is the third time BTG has asked shareholders for money in less than a year and is the second capital-raising exercise since new management took control last October.

Mr Berry, the former chairman and chief executive of the Blue Arrow employment agency, was succeeded at BTG by Alan Baldwin. He was chairman and chief executive of Securiguard, the security services group acquired by Rentokil. BTG's new management plan is to expand the group into photocopiers, parcel delivery, security and cleaning.

Three BTG directors - Mr Baldwin, his twin brother Paul Baldwin and Peter Dunckley - have also revised an options agreement, giving them options over shares equivalent to 9 per cent of the company for 7.7p a share. The previous agreement granted them options at between 15p and 25p a share for 18 per cent of the group.

BTG 's net assets after the acquisitions will be pounds 3m, making the equivalent gearing ratio 80 per cent.

BTG's half-year results showed that it lost pounds 96,000 before tax in the six months to June against losses of pounds 233,000. In the year to 31 December it lost pounds 4m compared with losses of pounds 6m the year before.

Trading in the shares was suspended awaiting the details of the placing, at 7p, and the acquisitions. The suspension price was 8.5p. Meanwhile, the company is changing its name to Berkeley Business Group.