Southern Bear Plc (LON:STBR), the AIM quoted support services and fire prevention specialist, has set out plans to raise £3.6m in a deeply discounted placing, subscription and a 1-for-40 open offer of shares priced at 4p each. The move triggered a 50% slide in the company’s share price to 0.32p early on. News of the fundraising came as Southern Bear reported a dramatic loss for the year to March 31 of £17.2m against a profit in 2009 of £0.8m. Most of the loss was attributed to writing down the assets and goodwill of sold and purchased businesses.

Today’s actions follow several months of major upheaval at Southern Bear. The previously acquisitive engineering and support services group was hit hard by the economic downturn and the group went on to sell all of its engineering subsidiaries in February 2010. Prior to that Steve Hancock was hired as chief executive, Mark Sims was appointed as COO and, later on, Michael Clough was hired as finance director. Just ahead of the sale of the engineering businesses, chairman Jon Pither left the group to be replaced by Nigel Wray. Under the strategy of the new management team a decision was taken to sell the engineering businesses and focus on the support services and fire protection / prevention markets, which is considered to hold greater opportunity for the group. Its subsidiaries now consist of BGC Ltd, Fenhams Ltd and Intumescent Protective Coatings Ltd.

As part of the fundraising, Southern Bear said it would use the proceeds to repay a loan made by Nigel Wray back in June totalling £2.2m and was also planning to change its name to Environ Group (Investments) plc.

Commenting on the proposals, Mark Sims, said: “In order to repay the loan recently issued by the group chairman, Nigel Wray, and to provide sufficient working capital for the business, we have launched a deeply discounted issue to raise £3.6m. The amount is being fully subscribed for and underwritten by myself and other group directors, however we are pleased to be able to give our shareholders the opportunity to participate in this fundraising as well. The board of directors is extremely optimistic about the future prospects for the group and remains focused on securing additional market share in the support services sector and demonstrating shareholder value as we move forward.”

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