Essential reading for the healthcare business
Remember me:
Skip Navigation LinksHealthInvestor article
HCL reveals £60m rescue fundraising plan

Healthcare Locums (HCL) is aiming to stave off insolvency with a £60 million refinancing package, the scandal-hit staffing firm has announced.

The company revealed details of the plan on the same day it announced financial results for the first time since the discovery of accounting irregularities in January.

The placing is intended to substantially reduce HCL’s debts, which stood at £125.6 million at the end of 2010. It will see Toscafund, the firm’s second-largest shareholder, offer £33.6 million for a 40% shareholding.

In addition, Ares Lux, the company’s mezzanine debt lender, has agreed to convert £22.4 million of debt into a 15% stake in HCL. Shareholders have been asked to approve the plan at an extraordinary general meeting on 12 September.

However, it is likely to face fierce opposition from a number of investors who have already expressed their concern at any debt-for-equity arrangements that will dilute their own shareholdings.

Commenting on the announced refinancing, HCL shareholder Permian Investment Partners told the Financial Times: “Toscafund and the company’s board have finally revealed their plans to acquire ownership of Healthcare Locums on the cheap – and it is every bit as cynical as we had feared.”  

However, HCL’s board warned that failure to approve the refinancing plan would likely result in insolvency and “in shareholders receiving no value for their current shareholdings”.

The board also said it had found “extremely poor levels of corporate governance” and a “lack of normal business policies and procedures and insufficient management of costs” during its investigations into the firm’s accounting irregularities.

This included listing software development costs on the firm’s balance sheet even though the computers in question were no longer being used by HCL. This resulted in an overstatement of net assets of £5.4 million.

The discovery of “serious accounting irregularities” in January led HCL to replace its entire board and dismiss the company’s founder and executive vice-chairman Kate Bleasdale. Trading in the firm’s shares was also suspended. HCL said it hoped the release of its results for 2010 and the refinancing deal would enable its trading on AIM to be resumed.

The results show the firm made a loss of £56.5 million last year on revenue of £157.2 million.

Posted on: 22/08/2011

Latest news stories

AXA PPP healthcare and Doctor Care Anywhere have partnered to improve the private online GP service, Doctor@Hand.
Troubled care home group Four Seasons Health Care is to hand over 57 leasehold homes to new operators, after reaching an agreement with the properties’ landlord, Healthcare Property Holdings.
HealthTech start-up PinPoint Data Science has raised more than £1 million as part of an early stage funding round, with support from investment platform Angel Investment Network.
Current Health has closed an $11.5 million funding round led by MMC Ventures, with participation from Legal & General, Par Equity and Scottish Investment Bank, the investment arm of Scottish Enterprise.
In an interview with online magazine The Elder, shadow care minister, Barbara Keeley, has defended Labour’s ability to afford its social care spending plans.


HealthInvestor blog
It’s almost upon us: the most significant general election for generations, according to the historians and political pundits, the result of which will define the UK’s role on the world stage for decades to come...

Click here to view the HealthInvestor blog

Advinia Health Care chairman Dr Sanjeev Kanoria’s experience of dealing with the Care Quality Commission’s market oversight function has led him to suggest a revised approach
‘Jefferies healthcare temperature check’ report, released on 20 November, indicated that leaders in the private healthcare sector remain relatively positive for 2020. Jenna Lomax explains that more investor activity is expected next year but Brexit uncertainty still casts its cloud
HealthInvestor UK’s editorial team bring you the highlights from the 2019 Summit
Kathy Oxtoby examines the trends and opportunities available in the UK dentistry market and talks to some of the key players
The NHS is facing unprecedented challenges, while some independent specialist hospitals are under severe scrutiny. Jenna Lomax delves into this year’s ‘State of care’ report from the Care Quality Commission which explains why some sectors are facing “unacceptable challenges”

Click here to search all feature articles

Digital primary care

Earlier this year, the UK digital primary care market felt full of potential for investors but who are the players and what are the products that stand out now that the dust has settled? Kathy Oxtoby investigates
Read more

Christie + Co

my images

Domiciliary Care
Rob Munro talks to the head of one of the country's leading domiciliary care providers about challenges and opportunities in a sector where many companies have foundered
Read more