Shares of W.H. Ireland Group took a significant hit on Friday as the company announced a heavily discounted share placing worth £5.0 million in order to avoid potential dissolution. At 7:18 GMT, the shares were down 73% at 6.0 pence, a drop of 16.5 pence.
In an effort to secure its future, W.H. Ireland Group will offer shares at a price of 3 pence each, representing an 87% discount from its previous closing price of 22.5 pence on Thursday.
The financial-services company faced difficulties in the second quarter, reporting a pretax loss of £1.1 million on revenue of £6.5 million. These results reflect a sharp decline in transaction activity within financial capital markets, as well as a decrease in assets under management.
Given the ongoing challenging market conditions, the company does not anticipate an improvement in the current quarter and expects to continue operating at a loss until at least November.
To support the share placing, TFG Asset Management UK, which holds a 28.5% stake in W.H. Ireland Group, has indicated that Polygon Funds intends to participate in the placement for up to £2.5 million. Polygon Funds has expressed its intention to waive the AIM rules requirement of making a mandatory cash offer for the company, even if its stake exceeds 30%.