Intermediate Capital Group, the mezzanine capital provider, yesterday announced plans to raise about £82m from its shareholders in a placing and open offer following a 23 per cent rise in interim pre-tax profits.
The company said its offer to qualifying shareholders would enable ICG "to reduce its gearing and further increase its borrowing capacity".
The price for the proposed two for 13 offer is set at 915p a share, a discount of just 8.7 per cent to yesterday's opening price. ICG reported a rise in pre-tax profits for the year to the end of July of £5.9m, to £32.1m, as the European mezzanine loan market, which principally involves financing between start-up and IPO, has remained relatively robust.
The company's core income, which comprises net interest and fund management fees, rose by 31 per cent to £28.4m and capital gains were down from £16.3m last year to £15.9m this time. The portfolio of loans is diversified across 83 companies spread over 28 sectors and 11 countries and overall it has risen by 18 per cent over the past 12 months, to hit £1bn at the year end.
The chairman, John Manser, said this "strong growth in the buyout market throughout Western Europe" and the increased size of those buyouts, which are ICG's principal source of business, were key factors in the improved results although he did not expect the demand to continue "at quite the same pace". The company has also managed to benefit from the banks' caution in recent depressed economic conditions.
The company also announced the completion of a financing package for the takeover by CVC Capital Partners of the spread-betting company IG Index. ICG will provide £60m as part of the £143m deal that was completed last month.
Shares in the company rose 22.5p to 1,025p following the announcements.
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