ICG launches £351m capital raising

Mezzanine specialist Intermediate Capital Group (ICG) has announced an underwritten rights issue to raise £351m on 2 July. Shareholders have until 4 August to take up the 7-for-2 offer. The capital raising came after the investor reported its first loss for 20 years.

The rights issue will create 302 million new ordinary shares at 121 pence per share, a discount of 39% to the theoretical ex-rights price based on last week's closing price of 490 pence per ordinary share. Aviva, ICG's largest shareholder, has indicated it will back the issue.

ICG has also agreed with its creditor syndicate - comprising Lloyds, Royal Bank of Scotland and Credit Suisse - extensions for the repayment of £395m worth of bank facilities until 2013. The extensions, which are conditional upon successful completion of the rights issue, come in addition to a £150m extension announced early last month.

The capital is to be used to finance new investments in the buyout market, as well as to take advantage of refinancing opportunities, alongside ICG's closed-end investment vehicles, including the EUR1.25bn European Mezzanine Fund IV, which closed in April 2007.

The rights issue has been underwritten by JP Morgan Securities on behalf of JP Morgan Cazenove, RBS Hoare Govett, Credit Suisse, Lloyds and HSBC.

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