It is offering shareholders up to 745,715,976 new ordinary shares at 0.25p per share on the basis of 24 shares for every one existing ordinary share.
The £1.86m will be fully underwritten by the company’s chief executive, Ges Ratcliffe, who will also be taking up his full entitlement under the open offer, whereby shares are offered to existing investors.
The net proceeds of the open offer are expected to be up to £1.7m and will provide the company with sufficient resources to further reduce its debt and provide general working capital for Loanmakers.
Loanmakers suffered as a result of the withdrawal of FirstPlus in August.
The broker announced its preliminary results for the year ended March 31 2008 on June 19 at which time it reported that the year had been extremely challenging for the group, leading to a disappointing set of full-year results.
In October 2007, in light of the impact of certain modifications to its core IVA business, the board undertook a strategic review of the business, which culminated in the disposal of its IVA book to a consortium comprising Grant Thornton UK LLP and Payplan Solutions.
This resulted in its exit from the IVA and debt resolution activities and refocused the business on Loanmakers, which was acquired in June 2006.
The loan broking subsidiary performed well in the first half to September 2007, and had a record month in November achieving 600 loan completions. But the credit crunch has increasingly impacted Loanmakers’ performance during 2008.