Nelson Hurst nets pounds 28m from placing: Insurance broker will redeem Citicorp loan

NELSON HURST, the insurance broker, intends to use the pounds 28.5m net proceeds of a placing of its shares on the stock market to redeem a pounds 22.7m loan note of the Citicorp banking group and pounds 3.8m of preference shares, and to repay debt of pounds 2m.

The move completes the financing of its management buyout from Citicorp in 1991.

Announcing an issue price of 140p for the shares, which values the company at pounds 63.3m, the directors forecast that operating profits for the year ending 31 December would be at least pounds 7.2m, compared with pounds 3.8m a year ago.

Nelson Hurst said yesterday there were significant opportunities for growth in the UK-based businesses. It would also seek to expand overseas businesses, both through its existing operation and through new offices in the Asia- Pacific and Latin American regions, where the directors expect to see increasing demand for insurance products.

Nelson Hurst will develop these operations through joint ventures with local partners, although the group may invest in start-up situations or acquire established businesses.

The placing and intermediaries offer comprises 25.2 million ordinary shares, valued at an aggregate pounds 35.3m at the issue price. Of these, 21.8 million are new shares to be issued by the company and 3.38 million are to be sold by existing shareholders.

None of the directors is selling any shares in the issue. The directors intend to apply for a total of 292,714 shares.