Rifkind leads ArmorGroup to £31m pre-float fund raising

ArmorGroup, the private security services company chaired by Sir Malcolm Rifkind, the former foreign secretary, said it had raised £31m from institutional investors on the eve of its flotation.

ArmorGroup, the private security services company chaired by Sir Malcolm Rifkind, the former foreign secretary, said it had raised £31m from institutional investors on the eve of its flotation.

David Seaton, the finance director, said yesterday that the group, which provides bodyguards for corporations and diplomats in treacherous countries such as Iraq, Afghanistan and Colombia, said the City had had few qualms about investing in the sometimes controversial private security industry.

"We are a defensive security company. We do not take any offensive action," he said, distancing the group from any connection with private military or mercenary companies. "The share placing was considerably oversubscribed, which speaks for itself on the level of support we have received. Institutions have been very interested in us because we operate in an industry that is growing significantly."

About 30 institutional investors took part in the offer of 24.5 million shares at 125p each.

Mr Seaton said: "When the register becomes public, you will be impressed by the quality of investors we have." The £31m raised will be used to pay down debt.

ArmorGroup has 1,300 workers in Iraq. The widow of an employee who was killed by a landmine in Iraq spoke out against the company at the recent inquest into his death. She is reported to have called the company "callous and cold" in the way it had dealt with her and her family. Mr Seaton yesterday said ArmorGroup had only four fatalities in 20 years but it had reviewed its policies for dealing with employees and their families in light of this latest death.

ArmorGroup will be worth £65m when shares begin trading in London today. The directors will own 5 per cent but, along with their venture capital backers, will be locked into owning their shares until December 2005.