Better Capital - the fund managed by veteran investor John Moulton - is to raise £200m to invest principally in UK and Irish turnaround opportunites by converting to a protected cell structure.
The existing Better Capital Ltd will be converted into a protected cell company structure with assets and liabilities to be segregated into 2009 and 2012 cells.
The 2009 cell will hold all the current assets including investment in Better Capital Fund I and continue to be traded on the London Stock Exchange. New capital will be raised in the 2012 cell with shares traded separeately.
The Better Capital Fund II will raise £200m through a placing next year.
According to Better Capital Ltd chairman Richard Crowder, there is strong support by current and new investors directors and management.
Crowder said: “The effects of the recession experienced by the UK and Irish economies have continued and resulted in businesses suffering from poor trading conditions and restricted corporate credit.
“These conditions created a wide range of opportunities for Better Capital Fund I, which is now almost fully committed.”
Jon Moulton, chairman of consultant Better Capital LLP, adds: “Better Capital Fund I has rapidly developed a portfolio of high quality turnaround opportunities which is generating positive growth trends since Better Capital’s investment and operational input.
“With cash readily available, we have been able to assess and act quickly to save companies, invest in turnaround efficiencies and return companies to profitability.
“We expect banks to increasingly pull back from their support of distressed companies, as tough economic conditions persist and regulation forces banks to divest of equity.”
Moulton will subscribe to 30 million shares in the new cell, which will take his total investment to around £49.75m.
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