Listed law firm Ince Group is trying to raise a further £1.1m from existing shareholders by offering them the chance to buy more equity.

The company announced that qualifying shareholders are being invited to apply for open offer shares at a price of 5p. The idea of an open offer is usually to raise cash by giving shareholders the opportunity to buy a greater stake at a discount.

But the 5p offer is actually more than the 4.85p that shares are currently worth. The company’s shares were trading at 12p as recently as 27 July before they lost more than half their value when Ince announced plans to raise £7m to avoid ‘financial difficulties’.

Ince Group said: ‘The open offer will give qualifying shareholders the opportunity to invest in new ordinary shares at the same price as the placing and will provide the group with additional working capital.’

Last month the company raised around £9.1m through the placing of shares and an agreement with its principal funding bank to borrow £1.6m of sums repaid under its existing loan, as part of an agreement not to pay any dividends or distributions to shareholders before 30 March 2023.

It has also been reported that Ince has delayed two profit distribution payments this year, with one payment still outstanding.

In a statement this week, an Ince spokesperson said the firm has ‘taken hard decisions and definitive action’ to deal with financial issues. The spokesperson added: ‘During this period, we necessarily need to focus on stabilising our cash flow and this has unfortunately impacted some of our people.’

Ince’s market value has dropped dramatically since a year ago, when shares were trading at almost 53p. Since then, the group announced that pre-tax profits for 2022 were likely to be short of market expectations due to the war in Ukraine and a cyber attack in March.

It was announced last month that chief executive Adrian Biles would step down and resign from the board, ‘subject to and with effect from the conclusion of the fundraising’, to be replaced by Donald Brown – executive director of Ince and chief executive of corporate adviser and stockbroker Arden Partners, which was acquired in April.

 

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