Troubled medical staffing business Healthcare Locums (HCL) has announced a substantial refinancing of the company, following initial shareholder approval earlier this month.
The refi package includes a £60m placing and open offer of up to £4.25m to pay down some of its £110m outstanding debt.
Company shares were re-listed on the Alternative Investment Market on 13 September, but at just 10p per share - far below the 112p price when the shares were suspended in January after accounting irregularities came to light.
Earlier this month more than 50% of shareholders supported plans to raise the cash primarily from two large funds - Toscafund and Ares Capital (ACE) - with just 16% backing rebel investors.
Toscafund agreed to subscribe £33.6m for 336,375,000 new ordinary shares while, separately from the debt for equity conversion, ACE will subscribe £13.16m for 131,625,000 shares.
The refinancing is expected to put the company on a solid financial footing and provide the funds to give it the capability to generate returns and enable trading in ordinary shares on AIM to be resumed.
Peter Sullivan, chairman of Healthcare Locums, said: "The board believes that the refinancing, if completed will provide the group with a strengthened balance sheet and additional cash funding for operational initiatives, thereby creating a viable, sustainable capital structure giving it the capability to achieve significant returns."
The refi is conditional upon the final approval of the shareholders at the upcoming general meeting.
Back in January HCL suspended executive vice chairman Kate Bleasdale and chief financial officer Diane Jarvis amid allegations of accounting irregularities. This was then followed with Bleasdale resigning from the board of directors, having founded the healthcare recruitment firm back in 2003.
Two accounting issues came to light - the first involved HCL’s £6.7m acquisition of Redwood Health from Bleasdale's husband John Cariss, when auditors refused to sign off its accounts.
According to The Telegraph further details of a related-party transaction involving Bleasdale, HCL and Cariss was then uncovered.
The company board has also announced the publication of Healthcare Locums' audited financial statements for the year ended 31 December 2010.