Shares in City firm Ince & Co fell sharply today as the company sent out an immediate call for extra finance.

The money will be raised by selling shares at a reduced price and spent partly on reducing debts.

The group today announced an 'accelerated bookbuild' to raise a minimum of £12m through the conditional placing of new ordinary shares at a price of 45p a share.

Ince also proposes to raise a further £4m through offers to qualifying shareholders and staff members, with each group able to subscribe to 4,444,444 new ordinary shares at the issue price. The issue price represents a discount of 49.4% to the market price at close of business yesterday.

The proceeds of the fundraising will be used to reduce the amount of the group’s drawn down working capital facility and for general working capital to cover the company’s expansion.

Ince says it wishes to continue with its programme of partner recruitment, especially in the overseas offices to bolster and enhance their existing practices.

But the completion of the fundraising is conditional upon shareholder approval at a general meeting of the company, expected to be held on 3 February.

Today’s announcement had an immediate impact on the company’s value, with shares dropping 47% by 11am to 47p.

By 11.30am on the day of the bookbuild announcement, the company reported it had been completed and subsequently closed, with £12m raised through the placing of around 27m shares with certain existing and new institutional shareholders.

Chief executive Adrian Biles said: 'The funds raised will ensure that the group can continue to capitalise on market opportunities, including new lateral hires. The group has recently been joined by a number of very high calibre partners and fee earners and we are on track to deliver outstanding growth.

'I am very pleased that so many of our existing investors and some new institutional shareholders have supported this fundraise albeit at a significant discount to the market price of the company's shares, which is an unfortunate feature of the current market conditions.'

Biles noted that the share placing marks the completion of the Ince merger with Gordon Dadds. London-based Gordon Dadds had already listed on the stock exchange before it rebranded as Ince & Co last May. The previous incarnation of Ince & Co had entered administration at the end of 2018 and then Gordon Dadds acquired the business for a total of £27.3m in a pre-pack deal.