HCL investors fight to block fundraising

THE battle for medical staff provider Healthcare Locums heated up yesterday as rebel investors lobbied shareholders to reject plans for a £60m fundraising that would virtually wipe out all minority holdings.

US funds Permian Investment Partners and Arundel Capital urged shareholders to vote against the fundraising at next week’s general meeting, arguing that the share placement is far more destructive to minority investors than it needs to be.

Permian and Arundel, who believe they have the support of 21.6 per cent of HCL’s investors, say the board has failed to consider alternatives to the proposed plan, which would raise 15.5 per cent shareholder Toscafund’s stake to 40-42 per cent but dramatically cut almost all others.

“We believe the Board’s proposal results in excessive and unnecessary dilution and favours certain large shareholders at the direct expense of minority and individual shareholders,” they said in a statement.

The dispute is the latest setback for Healthcare Locums, whose board was appointed only in May after shareholders forced out the previous directors for allowing accounting irregularities so severe its shares were suspended in January.

The current board, chaired by Peter Sullivan, has produced fresh accounts and said the rescue fundraising is the company’s only option to avoid bankruptcy as it struggles to repay £135m in loans signed just before the accounting problems came to light.

Investors are due to meet on 12 September to vote on the plan but the rebel shareholders have called for a four week delay for bidders keen to buy the debt, such as US fund Mockingbird Holdings, to conduct due diligence. “The board has acknowledged to Permian that multiple interested parties exist,” they said.

HCL’s board hit back before the report was published, again denying any alternative plans had been tabled.