Troubled medical staff provider Healthcare Locums has outlined plans for the refinancing of the company.

In a bid to secure its future following a period of internal investigation into the company's finances, the group intends to raise £60m through a placing of shares, and a further £4.25m through an open offer of sharesd.

The move, which is subject to approval by shareholders, would reduce the company's debt and enable it to start trading again on AIM.

Existing major shareholder Toscafund has proposed to inject £33.6m into the company in return for 336,375,000 new ordinary shares while ACE has agreed to subscribe £13.16m for 131,625,000 shares.

If the refinancing is not approved by shareholders, the company would be in default and would lead to the company declaring itself insolventm leaving shareholders "receiving no value for their current shareholdings."

Peter Sullivan, Chairman of Healthcare Locums, said: "The board believes that the refinancing, if completed, will provide the group with a strengthened balance sheet and additional cash funding for operational initiatives, thereby creating a viable, sustainable capital structure giving it the capability to achieve significant returns."

The proposed deal would see the company issue 600m new shares at 10p per share, a sharp decrease from the group's share price of 112p in January, when shares were suspended.

The company has published its delayed final results, in which the 2009 results had to be restated, which showed that revenue was down at £157.2m to £167.5m. The company suffered a £56.5m pre-tax loss compared to a £7.9m profit in 2009.

"The complexity and extent of the challenges faced by the company has meant that the process of producing these audited financial statements has taken considerably longer than initially expected," Sullivan said.

"The board and I are confident that HCL can grow again and prosper from here on."

The share price is currently suspended.

NR

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