Helphire announces £50m share issue

Helphire Group has announced plans to raise £50 million by issuing new shares.

This move was forced by the Helphire’s lenders, who made further lending conditional on the fundraising.

The news comes as the group’s chief executive, Mark Adams, stands down to be replaced by turnaround veteran Richard Rose, appointed as executive chairman.

Helphire, which provides replacement cars for no-fault accidents, will issue 151.5 million new shares at £0.33 per share in a bid to boost its capital and increase profitability.

Existing shareholders will be given first choice on whether they want to buy the newly issued shares.

The company has been hit by a significant decrease in accident claims, which it blames on people driving less because of high petrol prices and the credit crunch.

Pretax profit at the group dropped 86% to £3 million for the six months ending 31 December 2008.

Commenting on the fundraising, Richard Rose said: “Along with the rest of the new management team at Helphire I am clear about the plan for improving the group’s profitability and cash generation.

“Tough decisions are being made, implementation of the plan is well underway and the fundraising will provide us with the resources we need to complete it.”